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Author: 


Cherington,  Paul  Terry 


Title: 


The  first  advertising  book 


Place: 


[  N  e  w  Yo  r  k] 

Date: 

1920 


MASTER   NEGATIVE   « 


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Cherington»  Paul  Terry,  187fi- 

The  first  advertising  book 9  by  Paul  Terry 
Cherington...   [New  York?^  Doubleday,  1920* 

iXf  604  p.   charts,  forms,   2(>|-  cm. 


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LIBRARY 


School  of  Business 


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1 


THE  FIRST  ADVERTISING  BOOK 


I 


THE  FIRST 
ADVERTISING  BOOK 


BY 

PAUL  TERRY  CHERINGTON 

ASSISTANT   PROFESSOR   OF  MARKETING   IN  THE  GRADUATE 
SCHOOL  OF  BUSINESS  ADMINISTRATION,  HARVARD  UNIVERSITY 

AUTHOR  OF 

"Advertising  as  a  Business  Force" 


PUBLISHED  BY 

DOUBLEDAY,  PAGE  &  COMPANY 

FOR 

THE  ASSOCIATED  ADVERTISING  CLUBS 

OF  THE  WORLD 

19i0 


>  /  ■' -^  /  0  /  /  ^ 


Copyrigktt  1916,  by 
The  Associated  Advertising  Clubs  of  the  World 

All  right*  reaened,  including  that  qf 

translation  into  foreign  language*, 

including  the  Scandinawian 


To 
LEWELLYN  E.  PRATT 

CHAIBMAN  OF  THE  EDUCATIONAL  COMMITTEE  OF  THE 
ASSOCIATED  ADVEBTIBINQ  CLUBS  OF  THE  WOBLO 

TfflS  BOOK  IS  DEDICATED 


at""'  *5lL 


*     I 


PREFACE 

The  chief  puri)ose  of  **  The  First  Advertising  Book "  is  to 
put  into  form  for  convenient  reference  some  of  the  available 
records  of  recent  progress  in  advertising  methods.  This  is  done 
with  two  separate  objects  in  view. 

One  object  is  to  give  to  such  persons  as  may  be  interested  in 
advertising  (but  who  are  not  familiar  with  its  inner  workings  in 
its  modern  forms)  a  clear  idea  of  what  is  being  done  from  within 
to  make  more  effective  this  part  of  the  present-day  selUng 
mechanism. 

The  other,  and  the  more  important  object,  is  to  help  those  who 
are  actively  engaged  in  selhng  operations  to  acquire  a  working 
familiarity  with  some  of  the  events  forming  current  advertising 
history.  To  such  persons,  the  records  of  these  events  may  have 
suggestive  value  in  connection  with  efforts  to  reduce  waste  in 
the  processes  of  distributing  merchandise. 

In  the  conclusion  of  "Advertising  as  a  Business  Force,"  a  simi- 
lar compilation  made  for  the  Associated  Clubs  in  1912-13, 1  called 
attention  to  three  hues  in  which  it  seemed  to  me  advertising 
was  making  distinct  progress: 

1.  Immediate  contact  with  selling. 

2.  Accurate  knowledge  as  a  basis  for  action,  and 

3.  Exacting  standards  of  honor.  ^^  , 

This  new  compilation  of  sopie  articles  which  have  appeared 
during  the  past  two  years  serves  to  show  clearly  that  the  prog- 
ress being  made  in  each  of  these  lines — as  well  as  in  others — is  of 
a  substantial  character. 

The  present  volume  may  be  said  to  have  been  built  around  the 
following  sentence  at  the  close  of  * 'Advertising  as  a  Business 
Force": 

"It  does  not  require  the  gift  of  prophecy,  then,  to  foresee 
the  very  imminent  coming  of  the  time  when  the  very  highest 
possible  standards  of  honor  in  advertising  appeal  will  not  merely 
be  *good  business'  but  will  be  absolutely  essential  to  any  ad- 
vertising appeal  which  can  be  expected  to  have  any  real  effect." 


vu 


VIU 


PREFACE 


Unfair  or  ignorant  attacks  upon  advertising  are  inevitable. 
They  are  to  be  expected  in  any  line  of  effort  which  touches  the 
public  at  large,  and  of  which  it  is  not  easy  for  the  public  to 
have  more  than  a  superficial  knowledge.  Moreover,  when  the 
contact  is  as  direct  and  the  knowledge  as  extremely  superficial 
as  in  this  case,  the  attacks  may  be  expected  to  be  numerous 
and  hard  to  answer  clearly. 

The  one  convincing  defence  which  advertising  can  make 
against  such  attacks  is  its  record  of  achievement.  Upon  this 
alone  can  it  afford  to  stand.  This  record,  however,  will  be  a 
conclusive  answer  to  criticism  only  in  so  far  as  it  shows  a  prac- 
tical combination  of  truth  and  real  service.  The  detnre  to  do 
honestly  the  work  assigned  to  advertising  needs  at  all  times  to 
be  supplemented  by  ability  to  do  it  well. 

It  would  be  diflBcult  to  find  any  branch  of  human  activity 
which,  m  as  short  a  period  of  time,  shows  a  record  such  as  the 
advertising  business  has  made  dming  the  past  few  years  for 
developing  from  within  itself  exacting  standards  of  ethics  and 
morals. 

K  this  development  were  complete  the  present  would  be  no 
time  for  issuing  a  compiled  record  of  advertising  experiences. 
But  the  work  has  only  begun.  The  mission,  therefore,  of  such 
a  compilation  as  this  is  not  the  recording  of  an  achievement  but 
the  reporting  of  progress. 

To  influence  demand  artificially  is  a  serious  matter.  Yet 
that  is  the  task  which  advertising  assumes.  The  responsibility 
on  all  who  engage  in  it  is  heavy.  Certain  leaders  in  the  pro- 
fession are  determined  that  advertising  is  to  be  as  free  from 
errors  and  waste  as  its  friends  can  make  it.  The  achievement  of 
this  result  calls  for  the  co-operation  of  all  concerned,  and  it  is 
necessary  that  this  co-operation  be  intelligent  as  well  as  sincere. 

The  Educational  Committee  of  the  Associated  Advertising 
Clubs  of  the  World  has  undertaken  the  task  of  doing  all  that 
concerted  effort  can  do  toward  making  pointed  and  constructive 
the  co-operation  of  every  advertising  club  member  in  the  feder- 
ated clubs.  If  this  book  takes  a  useful  part  in  this  work  its 
preparation  will  not  have  been  in  vain. 

Cambridge,  Mass. 
November  22, 1915. 


CONTENTS 


PART  ONE 

ADVERTISING  AND  THE  DISTRIBUTION  SYSTEM 

n     e  PAGE 

Preface ^ 

CHAPTER 

I .     Advertising  and  the  Consumer 3 

n .      Progress  in  Retail  Advertising 44 

III.  The  Regular  Retailer's  Field  and  Problems      .  82 

IV.  "Dealer  Helps"  from  the  Retailer's  Viewpoint  .  108 
V.     The  Regular  Retailer  and  National  Advertising  150 

VI .     The  Department  Store  and  National  Advertising  183 

VII.      The  Chain  Store  and  National  Advertising        .  229 

VlII.     The  Wholesaler  and  National  Advertising   .      .  288 


IX. 

X. 

XI. 

xu. 
xm. 

XIV. 


PART  TWO 

ADVERTISING  METHODS 

Advance  in  Methods  of  Analysis      .  \      .      .  311 

Developments  in  Advertising  Mediums        .      .  372 

Advance  in  Circulation  Standards    ....  437 

Direct-by-mail  Advertising 4^2 

Trademarks  and  Brands 494 

Advertising  Standards 555 

Appendix 5^^ 

I°d^x 597 


PART  ONE 


ADVERTISING  AND  THE 
DISTRIBUTION  SYSTEM 


CHAPTER  I 


ADVERTISING  AND  THE  CONSUMER 


t 
*  4 


HONESTY  has  been  called  a  "high  dilution  of  honor." 
By  analogy,  avoidance  of  untruth,  essential  as  it  is,  may 
be  called  a  high  dilution  of  what  is  meant  by  the  move- 
ment underlying  the  phrase  *  *  Truth  in  Advertising. '  *  The  mere 
telling  of  the  truth  is  far  short  of  what  advertising  is  capable 
of  achieving  and  what  advertising  ine\'itably  will  be  obliged  to 
demonstrate  its  ability  to  achieve.  The  great  task  of  adver- 
tising is  to  help  to  deliver  goods  from  the  producer  to  the  con- 
sumer better  and  with  less  waste  than  they  can  be  delivered 
without  this  help.  The  public  at  large  has  not  yet  grasped  the 
meaning  of  this.  Not  even  all  of  those  who  are  engaged  in  the 
practice  of  advertising  have  come  to  a  full  understanding  of  it. 
Under  date  of  January  18,  1915,  a  circular  signed  by  Mayor 
Mitchel's  Food  Supply  Committee,  George  W.  Perkins,  Chair- 
man, was  distributed  to  the  number  of  830,000  copies 
Attack  on  through  the  public  school  pupils  of  New  York  City. 
Advertised  This  circular  was  headed,  "  BUY  IN  BULK— NOT 
IN  PACKAGE,"  and  the  burden  of  it  was  a  plea  to 
householders  to  avoid  the  purchase  of  package  goods.  It  was  an 
attack  upon  the  whole  system  of  advertising  as  it  is  represented  by 
"identified  "  goods,  and  the  following  excerpts  from  it  show  how 
completely  the  committee  responsible  for  it  failed  to  understand 
the  real  nature  of  advertising  in  this  field.      The  circular  said : 

*Have  you  ever  stopped  to  figure  out  how  much  more  you 
would  get  for  your  money  if  you  bought  certain  articles  of  food 
by  the  pound  instead  of  by  the  package? 

Food  that  is  wrapped  and  sold  in  attractive-looking  pack- 

^Printeri  Ink,  January  48,  1915.  p.  45. 

3 


4  ADVERTISING  AND  THE  CONSUMER 

ages  must  of  necessity  cost  more  than  the  same  food  sold  in 
bulk,  which  means  sold  by  the  pound  looa  soia  m 

mnni''^  Tk'*  '''***•  ^^^  '^^  "■"  ^'"'  ^^onUining  the  food  costs 
money.  Ihe  wrapper  costs  money.  The  printing  on  the 
wrapper  costs  money.  And  it  also  costs  money  to  fill  the  pack! 
ages  and  seal  then,.  It  follows,  therefore,  that  you  cCot 
possibly  get  as  much  food  for  your  money  when  so  large  a  part 
of  your  money  has  to  pay  for  the  bo.x,  wrapper,  printing,  etc 

pJi.""^  "^  '■^^°"'  "'^^  '°  ""^"^  ^'^^'''^  P"t  "P  i" 

First:  The  package  looks  pretty,  appeals  to  the  eye    and 
makes  the  food  seem  more  appetizing  ^ 

anH  rr*^'  -^"'^  °^  *^^  packages  are  air-tight  and  dustproof. 

fslnJu^jrpTcbJer  ^  '''''  "''"^  P^P'^  P--^^-  '^'^^^ 

hJ^  tnT-ll*""  °^  [f\'J^  '"  P°f  "''^  ^°'"  y"""-  g'-°ce'-  to  keep  on 
hand,  n  bulk,  exactly  the  same  foods  as  the  packages  contain;  and 
It  IS  also  possible  for  him  to  keep  them  in  bulk  in  a  perfectly 
san^aiy  manner,  so  that  dust  and  dirt  cannot  reach  them  ^ 

\\e  have  looked  into  the  matter  of  the  relative  cost  of  cer- 
tain articles  bought  in  package  as  compared  with  the  same 
things  bought  loose  or  in  bulk.     The  articles  referred  to  wwe 

and'tefrH^^l  °"  °T  i°^«^«g*tor,  the  quality  was  compared! 
and  the  articles  weighed  and  measured  in  our  own  office. 

Then  there  followed  a  list  of  seventeen  articles  commonly 
sold  m  packages  with  a  statement  of  the  price  at  which  it  was 
declared  that  equivalent  articles  could  be  bought  in  bulk.  The 
circular  then  continued: 

»i  J!^^»  ^^""'"^  ^°"  .^"^  *.'''"8^  '"  packages  when  you  can  get 
almost  twice  as  much  of  the  same  article  for  the  same  amount 
of  money  if  you  buy  it  in  bulk.'  luiouni 

Sit  down  and  make  a  list  of  the  various  foods  that  you  have 
been  in  the  habit  of  buying  in  packages.  '^ 

thSTn  bulk      """"^^  ^""  '°'^^'  ^""^^  ^"-'^^  ^'"^  y°"  •'""gilt 

Make  up  your  mind  to  buy  them  in  bulk  in  the  future,  if  it 
IS  possible  for  you  to  get  them. 

^t  ^'"  pay  you  to  break  yourself  of  the  package  habit.    There 

'Printer}'  Ink.  January  48,  1915,  p.  49. 


) 


ADVERTISING  AND  THE  CONSUMER  5 

arc  many  foods  sold  now  in  packages  only  that  your  grocer  will 
be  glad  to  carry  in  bulk  as  soon  as  he  knows  that  you  and  his 
other  customers  want  them. 

The  manufacturer,  the  wholesale  dealer,  and  the  retail  dealer 
keep  on  the  watch  all  the  time  to  find  out  what  the  public 
wants.  Of  late  years  the  public  has  seemed  to  want  food  in 
attractive  packages  at  a  high  cost.  As  soon  as  people  learn 
that  by  demanding  it  they  can  get  exactly  the  same  food  in  bulk, 
kept  in  a  perfectly  sanitary  manner,  for  about  one  half  to  two 
thirds  the  cost  of  package  goods,  the  manufacturer,  the  whole- 
saler, and  the  retailer  will  meet  the  demand. 

This  is  one  way  to  cut  down  the  cost  of  living,  one  way  to 
live  just  as  well  for  less  money.  Study  the  questions  yourself 
and  pass  these  pointers  on  to  your  neighbors.* 

The  real  importance  of  this  circular  in  the  advertising  world 
does  not  come  from  the  fact  that  it  was  issued  by  a  committee 
with  headquarters  in  New  York  City  Hall,  nor  from  the  fact 
that  it  was  signed  by  so  eminent  a  person  as  George  W.  Perkins, 
nor  even  from  the  fact  that  nearly  a  million  copies  of  it  were 
circulated  in  New  York  City,  Its  chief  importance  arises 
from  the  fact  that  it  suggests  possibilities  of  concerted  action 
by  consumers  which  will  test  the  value  of  advertising  as  it 
never  has  been  tested  before. 

Truth  in  advertising  must  be  jealously  guarded,  but  beyond 
this  there  is  a  larger  responsibility  which  underlies  most  of  the 
recent  achievements  in  advertising  and  selling  practice.  That 
is  the  responsibility  of  real  service.  If  advertising  can,  and 
will,  make  it  possible  to  deliver  bettfer  goods  to  the  consumer 
with  less  commercial  waste  than  is  possible  without  its  use, 
the  circulation  of  countless  misleading  circulars  cannot  turn  the 
public  permanently  against  it.  If  advertising  cannot  do  this, 
it  must  exj>ect  to  give  way  to  whatever  more  economical  and 
effectual  method  may  be  developed  for  performing  its  work. 

Serving  the  best  interests  of  the  consumer,  therefore,  no 
longer  may  be  regarded  as  a  moral  matter  alone.     It  may  be 

•An  extended  reply  to  this  circular  will  be  found  in  Chapter  XIII  of  thii " 
compilation. 


fife 

I 

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fill 


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^ 


6  ADVERTISING  AND  THE  CONSUMER 

said  to  have  already  become  the  measure  by  which  all  existing 
or  new  methods  m  advertising  must  be  judged 

This  compilation  of  records  of  some  of  the  main  events  in 
American  advertismg  histoo^  during  the  past  few  months  will 
commence  with  a  discussion  of  some  of  the  relations  of  adver- 
tising problems  to  the  consumer's  interests.  This  will  be  fol- 
lowed by  a  discussion  of  some  of  these  same  problems  as  they 
»!r  .,''"T,  *T'  1  *^tributing  organizations,  first  reta^ 

^i!       »r  ;     '^-     ^^"'^  ^'"  ^  '""^t^^ted  by  descriptions 
of  the  methods  employed  m  certain  conspicuous  campaigns. 
The  latter  part  of  the  compilation  will  be  devoted  to  what 

tiZ.      Tk  1  ""T  ''t'^^  'Advertising  problems  and  adver- 
tismg  methods.    But  throughout  the  compilation  it  will  be 
necessary  to  keep  in  mind  the  supreme  question  of  the  adver. 
tiser:  Are  advertising  problems  being  attacked  and  are  ad- 
vertising methods  being  developed  in  such  a  way  as  to  permit 
advertising  to  play  its  rightful  part  in  modern  distribution? 
The  Con-       Shortly  after  Mayor  Mitchel's  Food  Committee 
a'::^    l^i  T'^''  '*^  "^POrt.  the  Housewives'  League,  which 
to  tke      Jiad  been  established  before  the   report   was   issued 

'"Xr  ^'^  :^^'  ^^.  '^^  "»t««t  appeared  to  agree  with 
resolutions  "^^   "*    *•**   "^P^""''    P*^^   'he   following 

\J^''ZT^iJ^'^  *'•*  mceplion  of  the  Housewives'  League  movement  it  has 

l^rofcX'XnC  ^^''^,«'loo^  P«-lucts;  (he^S.I^'^it^'*"'''""'"^- 
the  use  of  bulk  goods.  ^"'^ »  ^  ooa  Supply  Committee  m  recommending 

lo?^"""  *^."!f '^  ^^^^^  '^  "^"^^^^  ^y  ^^^*"^^^*'  ^^^  of  February  1 1 
1915,  as  follows  as  to  Hie  origin  and  work  of  the  organization :     * 


ADVERTISING  AND  THE  CONSTOIER  7 

"When  we  first  organized  the  League  and  I  became  its  pres- 
ident," said  Mrs.  Heath  to  Printers'  Ink,  "it  seemed  perfectly 
obvious  that  one  of  the  greatest  causes  of  the  increase  in  the 
cost  of  living  was  the  increase  in  the  number  of  food  products 
put  up  in  packages.  We  started  in  to  educate  the  house- 
wives, and  I  began  to  speak  and  write  against  the  ^package 
habit.'  I  even  wrote  Printers'  Ink  about  it.  But  we  were 
interested  quite  as  much  in  the  sanitary  handling  of  food  prod- 
ucts as  we  were  in  economical  pricing,  and  in  spite  of  myself 
I  found  myself  eventually  forced  to  the  conclusion  that  there 
could  be  no  sanitary  condition  for  the  product  unless  it  were 
both  made  under  such  conditions  and  transmitted  to  the  market 
and  the  consumer  without  subsequent  contamination.  I  found 
it  true  not  only  that  the  package  goods  were  best  protected 
from  insanitary  handling,  but  that  they  were  most  likely  to 
be  pure  and  unadulterated  in  the  beginning  and  be  produced 
or  put  up  in  a  cleanly  way.  I  learned  this  from  visiting  a  large 
number  of  factories  and  seeing  it  for  myself. 

"When  I  asked  myself  why  this  was  so,  I  had  no  difficulty  in 

finding  the  answer:  it  was  because  the  manufacturers  of  the 

package  goods  had  made  themselves  responsible  for 

Backfu^   their  goods  by  printing  their  name  on  the  package 

Package     ^^^  making  it  possible  for  the  public  to  identify  the 

Goods      goods,  and,  if  it  liked,  go  to  the  factory  as  I  had  done 
and  see  under  what  conditions  it  was  made  or  put  up. 

"When  I  had  reached  this  conclusion  I  was  at  a  loss  for  the 
moment  to  know  what  to  do.  We  had  inaugurated  a  move- 
ment against  package  goods  in  the  interest  of  economy  and  had 
begun  to  interest  many  influential  people.  We  could  not,  of 
course,  have  gone  far  with  such  a  movement  which  runs  counter 
to  the  economic  current.  .  .  .  The  members  of  the  league 
are  'requested  to  co-operate  by  refusing  to  buy  goods  that  are 
not  properly  protected  from  dust,  dirt,  and  flies,  or  that  are 
handled  in  an  unsanitary  manner.*  This  was  started  last  year, 
but  the  league  has  improved  its  strategy  by  devising  a  sign  for 
the  grocer  or  butcher  who  passes  85  per  cent,  on  a  shop  inspec- 
tion by  members  of  the  league.  There  is  a  printed  form  which 
calls  for  a  description  of  the  store,  the  stock-rooms,  the  stock 
itself,  and  the  general  cleanliness  of  the  clerks,  the  shop,  etc. 
The  league  does  not  work  through  committees,  but  through 
individuals.  Each  member  sees  her  tradesman.  This  helps 
to  make  the  league  work  effective.     The  best  grocery  stores  in 


if 


8 


ADVERTISING  AND  THE  CONSUMER 


New  York  have  been  glad  to  display  the  sign.  It  is  expected 
that  grocers  who  cannot  get  it  will  take  steps  to  deserve  it 
rather  than  lose  custom. 

"The  bearing  of  this  on  the  package  habit  is  obvious;  it  is 
strong  support.     .     .     .'* 

This  organization  has  certain  points  of  similarity  to  the 
National  Consumers'  League,  through  which,  for  several  years, 
consumers  have  exercised  a  somewhat  similar  influence  in  the 
sale  of  women's  and  children's  wearing  apparel,  insisting  that 
certain  conditions  of  manufacture  and  sale  be  lived  up  to  if  the 
patronage  of  the  members  of  the  League  is  to  be  expected.  For 
advertisers  both  of  these  movements  get  their  significance 
from  the  fact  that  the  public  apparently  is  becoming  conscious 
of  its  power  to  insist  that  it  be  not  only  well  served,  but  that 
it  be  served  in  the  best  possible  manner. 

Another  aspect  of  this  problem  of  the  relations  of  advertising 
to  the  interests  of  the  consumer  was  brought  out  by  Hugh 
Chalmers  of  the  Chalmers  Motor  Company  when 
he  outlined  a  plan  of  constructive  action.  This 
he  did  at  the  dinner  tendered  to  Edward  W.  Hazen 
in  New  York  City  on  February  25th  at  the  time  when 
Mr.  Hazen  retired  from  his  position  as  advertising 
director  of  the  Curtis  Publishing  Company : 


A  Plan 

far 
Action 
by  Ad- 
vertisers 


*Mr.  Chalmers  asked  what  the  manufacturer  could  do  to 
meet  the  most  urgent  problem  of  the  high  cost  of  living.  It 
is  not  likely  that  the  cost  of  raw  materials  will  decrease.  Wages 
will  not  be  reduced,  nor  should  they.  Moreover,  haven't  the 
biggest  savings  coming  from  quantity  production  already  been 
effected.^  The  best  chance  for  great  savings  lies  in  lowering 
the  cost  of  distribution.  Advertising  can  be  used  to  reduce 
this  cost  if  certain  obstacles  which  are  preventing  it  from  ac- 
complishing the  best  results  are  removed. 

**What  are  the  things  that  prevent  us  from  getting  one 

^Printers   Ink,  Marcli  4.  1915.  p.  59. 


> 


' 


ADVERTISING  AND  THE  CONSUMER 


d 


hundred  cents'  worth  of  sales  value  out  of  every  advertising 
dollar  we  spend  .^"  Mr.  Chalmers  asked. 

"I  think  the  greatest  cause  of  waste  in  advertising  is  in  the 
fact  that  too  large  a  section  of  the  public  is  still  skeptical  about 
advertising.     Too   many   people  are   still  in   the  attitude  of 
mind   to  say,  *0h,  that  is  only   what  the   advertising   says; 
but  it  doesn't  prove  anything.'     This  condition   of 
Where      mind,  I  think,  is  due  to  two  chief  causes.     First,  that 
T^   there  has  been   and  still  is,  in   spite  of  much   im- 
Public      provement,  too  much '  bunk '  in  advertising.    The  man 
Htarts      who  sticks  to  truthful  advertising  has  too  much  to 
overcome   in    the  exaggerated   statements  of  other 
advertisers.     There  is  still  too  much  advertising  of  propositions 
that  are  purely  *fake.'     The  publications  which  continue  to 
run  advertising  of  questionable  propositions,  or  of  *fake'  prop- 
ositions pure  and  simple,  are  doing  the  general  cause  of  ad- 
vertising great  harm.     By  these  methods  they  are  contributing 
to  the  high  cost  of  advertising. 

"The  second  cause  for  public  skepticism  of  advertising  is  a 
lack  of  public  understanding  of  advertising.  What  advertising 
needs  most  is  to  he  advertised.  The  people  generally  do  not 
understand  it  well  enough;  that  is,  they  do  not  understand 
well  enough  the  direct  benefits  that  may  come  to  them 
through  advertising.  I  have  had  in  mind  for  a  long  time 
that  a  full  explanation  of  advertising,  what  it  is  and  what 
it  really  accomplishes  for  all  the  public,  should  be  made 
to  the  public.  Specific  instances  should  be  given,  and  they 
should  be  multiplied  from  month  to  month  and  from  year  to 
year. 

"My  present  notion  is  that  this  should  be  in  the  form  of  a 
booklet,  because  I  believe  it  is  impossible  in  page  announce- 
ments in  the  magazines  and  newspapers  to  tell  this  story  of 
advertising  in  a  satisfactory  way.  This  is  not  a  work  that  any 
one  publication  can  or  should  do,  or  any  one  advertising  man 
or  advertising  agency.  It  is  a  work  that  all  should  do  together, 
using  a  carefully  worked  out  plan.  My  suggestion  would  be 
that  the  main  part  of  this  plan  be  a  booklet  dealing  with  ad- 
vertising in  its  broader  aspects,  especially  making  very  plain 
the  actual  service  that  advertising  renders — not  to  the  selling 
public,  but  to  the  buying  public. 

"Now  it  seems  to  me  if  some  committees  representing  the 
publishers,  the  advertising  agencies,  and  the  advertisers  could 


10 


ADVERTISING  AND  THE  CONSUMER 


ADVERTISING  AND  THE  CONSUMER 


11 


be  named  to  get  up  this  booklet  on  the  benefits  of  advertising 
to  the  buying  public,  that  it  would  be  a  service  well  worth  while 
rendering,  and  one  that  would  help  to  put  advertising  on  a  higher 
business  and  moral  plane  than  it  is  to-day. 

"The  cost  of  such  a  booklet  properly  should  be  paid  from  a 
fund  contributed  by  advertising  agencies,  publishers  of  maga- 
zines and  newspapers,  and  leading  advertisers  of  the  country. 
I  think  it  would  be  to  the  interest  of  every  publisher  of  maga- 
zines and  newspapers  in  the  country  to  give  the  space  free  to 
advertise  this  booklet  and  to  distribute  it  free  to  any  person 
who  would  like  to  have  it.'*     .     .     . 

The  most  absorbing  question  in  the  public  mind  to-day  is 
how  to  meet  the  increased  cost  of  living.  It  is  coming  to  be 
recognized  that  if  there  is  any  answer  to  this  it  will  not  be  found 
in  any  single  remedy,  but  in  a  combination  of  them.  Not  the 
least  among  those  in  the  combination  will  be  minimizing  of 
waste  by  every  possible  means.  Advertising  may  expect  to 
take  its  turn  at  being  criticised  and  investigated.  It  will  be 
obliged  to  show  that  it  is  an  effective  and  economical  aid  to  the 
process  of  merchandise  distribution.  And  in  the  meantime  it 
may  expect  attack  in  exaggerated  forms  from  those  with  whose 
interests  it  conflicts. 

The  consumer  occupies  the  position  of  advantage  in  this 
struggle.  From  him  all  decisions  will  come,  and  these  decisions 
may  all  be  expected  to  be  made  in  his  own  interest.  The 
advertiser  who  forgets  this  for  any  length  of  time  is  picked  for 
destruction.  Thus,  the  advertiser  who  insists  upon  being  of 
real  service  to  the  consumer  is  no  longer  doing  merely  a  highly 
moral  thing.  He  is  taking  the  only  safe  course,  if  he  expects 
to  continue  in  business. 

Since  that  indefinite  composite  to  which  we  have  referred  as 
"the  consumer"  has  the  final  voice  in  the  future  of  advertising, 
it  may  be  well  to  look  at  some  of  his  main  characteristics  which 
bear  directly  on  the  problems  of  the  advertiser.  The  following 
excerpts  cover  some  of  these.  They  make  it  clear  that :  (1)  While 
a  brand  or  other  means  of  identification  may  be  useful  to 


the  consumer,  it  does  not  live  long  in  his  mind  and  it  has  no 
great  value  to  him  unless  it  is  associated  with  some  real  serv- 
ice. (2)  The  guarantee  of  quality  and  the  preservation  of 
it  is  a  real  service,  and  to  this  the  consumer  responds  with 
an  allegiance  which  is  a  tangible  asset  to  the  guarantor.  (3) 
The  consumer  and  the  conditions  of  consuming  are  constantly 
changing  so  that  it  is  not  enough  merely  to  serve  the  consumer. 
Effectual  methods  of  modifying  the  service  to  new  conditions 
are  necessary,  and  the  consumer  needs  to  be  remmded  that  the 
service  is  being  rendered.  (4)  Close  contact  between  the 
advertiser  and  the  consumer  is  a  necessity.  This  contact  is 
needed  as  much  for  the  education  of  the  advertiser  as  for  the 
shaping  of  the  wants  of  the  consumer: 

(1)    THE    LENGTH    OF    THE    CONSUMER'S    MEMORY 

There  is  much  dispute  in  various  quarters  as  to  the  success 
with  which  the  methods  of  advertising  now  employed  actually 
secure  control  over  the  public's  purchases  by  identifying  the 
product  through  a  trademark  or  by  connecting  it  with  the 
manufacturer's  name.  The  only  satisfactory  answer  to  this 
question  comes  from  tests  of  sales  over  a  long  period  of  time 
and  a  comparison  of  these  results  with  the  cost.  At  the 
same  time  there  is  a  good  deal  of  interest  and  some  suggestive 
value  in  tests  made  on  a  small  scale  like  that  reported  by 
Cheney  Brothers.  This  test  of  course  was  not  on  a  suflS- 
ciently  large  scale  to  justify  its  use  as  the  basis  for  the  develop- 
ment of  advertising  efforts,  but  it  may  have  substantial  value 
as  a  measure  of  the  readiness  with  which  the  consumer  responds 
to  appeals  of  different  types. 

*How  quickly  are  trade  names,  slogans,  etc.,  recognized,  and 
how  accurately  do  consumers  identify  them.^  That  question 
is  the  basis  of  a  test  recently  concluded  by  Cheney  Brothers, 
South  Manchester,  Connecticut,  makers  of  Cheney  Silks.  The 
results  have  been  given  to  Printers'  Ink. 

*Pnnteri  Ink,  August  20,  1914,  pp.  61,  6i2,  65,  and  66. 


f 


12  ADVERTISING  AND  THE  CONSUMER 

Horace  B.  Cheney,  who  has  charge  of  the  concern's  advertis- 
ing, wanted  to  find  out  the  relative  value  of  certain  kinds  of 
appeal.  He  wanted  some  indication  of  the  impressions  made 
upon  different  people  by  firm  names,  trademarks,  slogans,  and 
names  of  products.  Which  would  be  most  quickly  recognized 
and  identified  as  belonging  to  a  certain  product? 

The  experiment  was  tried  on  117  persons,  90  men  and  27 
women,  practically  all  of  whom  were  employed  by  Cheney 
Brothers.     Mr.  Cheney  says  : 

"The  questions  were  submitted  to  a  men*s  club  composed  of 
clerks,  room  superintendents,  and  workers  of  the  better  class 
aad  these  comprised  the  larger  part  of  the  men  who  filled  in 
the  blanks.  Boys  and  girls  under  fifteen  years  of  age  were 
also  asked  to  make  replies,  and  we  were  surprised  to  find  that 
some  of  the  most  complete  and  accurate  replies  were  from 
children  under  fifteen  years  of  age.  The  women  were  composed 
of  clerks,  members  of  families,  and  workers,  both  well-to-do 
and  m  very  moderate  circumstances,  a  fair  representation  of 
each  class  being  made  among  both  the  men  and  the  women. 

**  Nobody  was  given  an  opportunity  to  consult  any  magazine 
or  look  through  any  advertising  material,  or  consult  with  any 
other  person  before  making  his  replies,  and  all  were  requested 
to  do  It  rapidly,  simply  naming  the  things  which  first  came  to 
mmd. 

The  following  questions  were  the  basis  of  the  test: 
"1.  What  are  the  products  manufactured  by  firms  using  the 
followmg  names.?*  Htmilton,  Oneida  Community,  Welch 
Peter's,  Lydia  Pinkham,  Gillette,  Ford,  Williams,  Mellen, 
Waterman,  Pears,  Iver  Johnson,  Tiffany,  Heinz,  Hart,  Schaffner 
^^ara,  Beecham,  Chalmers,  Colgate,  Campbell,  Pabst,  Stein- 
way,  Kellogg,  Fairbanks*,  Skinner,  National  Biscuit  Company, 
KJeinert. 

"2.  What  are  the  following  products  and  who  makes  them.? 
Bon  Ami,  Beaver  Board,  Nabisco,  Pompeian,  Big  Ben,  Prince 
Albert  Keen  Kutter,  Aeolian,  Velvet,  Uneeda,  Koh-i-noor, 
B.  V.  D.,  AIco,  Zu  Zu. 

"3.  What  are  the  trademarks  used  by  Heinz,  Dutch  Clean- 
ser, National  Lead  Company,  Skinner's  Satin,  Beaver  Board, 
American  Telephone  &  Telegraph  Companv,  National  Biscuit 
Company,  Cream  of  Wheat,  Fairy  Soap,  Ford,  Swift  &  Com- 
pany? 

"4.  Who  says  *Ask  the  man  who  owns  one,'  *  Good-bye,  old 


ADVERTISING  AND  THE  CONSUMER  13 

hook  and  eye,'  'Hammer  the  hammer,'  'It  hasn't  scratched 
yet,  *It  floats,'  *You  dirty  boy,'  'There's  a  reason,'  'OOt^A^ 
pure,'  'One  of  the  57,'  'Chases  dirt'?  " 

Only  five  seconds  were  allowed  for  the  answer  to  each  ques- 
tion.    The  results  are  tabulated  by  Mr.  Cheney  as  follows: 


PERCENTAGES  OF  CORRECT  ANSWERS 

1.  What  are  the  products  manufactured  by  firms  using  the 
following  names: 

„      .,,  Men  Women  Total 

Hamilton 70.0%  77.8%  71.8% 

Oneida  Community 50.0%  59.2%  52  6% 

Beecham's 85.5%  66.7%  81.2% 

Campbell  8 90.0%  81 .5%  88.0% 

^.^"°f«« 76.7%  77.8%  76.9% 

^^f^^t ^^%  77.8%  93.2% 

^f  "P*^ 27.8%  55.6%  34.2% 

™^^ « ; 80.0%  92.6%  82.9% 

g'P^^rs 78.9%  66.7%  76. 1% 

Z^^^^ 90.0%  85.2%  88.8% 

Ford                         98.9%  100.0%  99.0% 

Fairbanks  (scales) 65.6%  62.9%  64.9% 

Fairbank  (soaps) 30.0%  33.3%  30  8% 

^«^^t« 93.3%  96.4%  94.9% 

Chalmers 84.4%  77.8%  82.9% 

Jy^^"^^"^"  •  •  ;  ,, 87.8%  85.2%  87.2% 

Hart,  Schaffner  &  Marx 85.6%  66.7%  812% 

^emz 94.5%  96.3%  94.9% 

Welch 82.2%  81.5%  82.5% 

™*^°^ 96.7%  100.0%  97.4% 

^^J^'^^y 97.8%  92.6%  96.5% 

™*°y 95.6%  88.9%  94.0% 

Sff 94.5%  100.0%  95.7% 

Waterman  .. .          97.5%  100.0%  98.3% 

National  Biscuit  Company 91.1%  88.9%  90  6% 

?  !i-    I?-  lu ®11%  96.3%  84.6% 

Lydia  Pinkham 91.1%  741^  73.6% 

Average 82.0%  80.8%  81.5% 

2.  What  are  the  following  products? 

u       .     .  Men  Women  Total 

Bon  Ami  . .      90.0%  96.3%  91.5% 

Beaver  Board    47.8%  48.1%  47.9% 

tT'^^ 62.2%  70.4%  64.1% 

^f*^^* 85.6%  85.2%  86.3% 

^*«  ^o    •  •    71.1%  70.4%  70.1% 


14  ADVERTISING  AND  THE  CONSUMER 

Men  Women ' 

?•  V-  I> 74.4%  55.6% 

Nabisco 38.9%  40.7% 

Koh-i-noor  (snaps) 5.6%  7.4% 

Koh-i-noor  (pencils) 50.0%  51 .8% 

Pompeian 85.6%  92.6% 

Prince  Albert 88.9%  77.8% 

Uneeda  Biscuit 91 . 1%  100  0% 

2p  ^V 46.7%  44.5% 

KeenKutter 88.9%  88.9% 

Alco 71.1%  62.9% 

Average 66.5%  66.2% 


2A.  Who  makes  them? 

Men 

Bon  Ami 68.9% 

Beaver  Board 111% 

Aeolian 26.7% 

Velvet 22.2% 

Big  Ben 5.6% 

B.V.D 7.8% 

Nabisco 77 . 8% 

Koh-i-noor  (snaps) l .  1% 

Koh-i-noor  (pencils) 15 . 6% 

Pompeian 15 .5% 

Prince  Albert 14 . 4% 

Uneeda  Biscuit 73 . 3% 

Zu  Zu 57.8% 

Keen  Kutter 20.0% 

Alco 34.4% 

A  verage 30 . 1  % 


3.  What  are  the  trademarks  used  by? 

Men 

Swift  &  Co 32.2% 

Beaver  Board 16 . 6% 

Am.  Telephone  &  Telegraph  Co 40.0% 

Fair>'  Soap 44 . 4% 

Ford 4.4% 

Skinner's  Satin 31 . 1% 

National  Lead  Co 28 . 9% 

Cream  of  Wheat 54 .4% 

National  Biscuit  Company 18.9% 

Old  Dutch  Cleanser 73.3% 

Heinz 70.0% 

Average 37.7% 


Total 

70.1% 
39.3% 
6.0% 
50.4% 
87.2% 
86.3% 
93.2% 
46.2% 
88.9% 
70.9% 

66.6% 


Women 

Total 

51.8% 

56.4% 

8.5% 

29.6% 

27.3% 

25.9% 

23.1% 

4.3% 

5.9% 

55.6% 

72.6% 

.9% 

22.2% 

17.1% 

25.9% 

17.9% 

7.4% 

12.8% 

55.6% 

69.2% 

48.1% 

55.6% 

18.5% 

19.67o 

33.3% 

34.2% 

24.9% 

28.4% 

Women 

Total 

33.3% 

32.4% 

18.5% 

17.1% 

37.0% 

39.3% 

66.7% 

49.6% 

3.7% 

4.3% 

29.6% 

80.8% 

14.8% 

25.6% 

55.6% 

54.7% 

18.5% 

18.8% 

77.8% 

74.4% 

59.2% 

67.5% 

37.7%         37.7% 


ADVERTISING  AND  THE  CONSUMER  15 

4.  Who  says? 

Men  Women  Total 

"You  Dirty  Boy" 23.3%  37.0%  26.5% 

"There's  a  Reason "  (Postum) 44 . 4%  44 . 5%  44 . 4% 

"  There's  a  Reason  "  (Grape  Nuts) 20 . 0%  29 . 6%  22 . 2% 

"It  Floats" 68.9%  77.8%  70.9% 

"Good-bye  Old  Hook  and  Eye"   8  9%  18.5%  11.1% 

"Ask  the  Man  WTio  Owns  One" 31 . 1%  29.6%  30.8% 

"Chases  Dirt" 66.7%  74.1%  68.4% 

"One  of  the  57" 66.7%  70.4%  07.5% 

"99  44, 100%  Pure"   41.1%  51.8%  43.6% 

"Hammer  the  Hammer" 43.3%  40.7%  42.7% 

"It  Hasn't  Scratched  Yet" 66.7%  70.4%  '67.5% 

Average 43.7%        49.5%        45.1% 

Perhaps,  as  Mr.  Cheney  says,  the  results  of  the  experiment 
do  not  **prove  anything,"  but  they  at  least  indicate  that  nobody 
is  safe  in  assuming  that  his  name  and  his  product  is  so  well 
known  that  he  can  rest  on  his  oars  with  security.  Probably 
the  investigation  was  not  conducted  according  to  strictly  scien- 
tific principles,  and  it  is  easy  to  see  where  many  errors  might 
creep  in.  It  is  interesting  to  note,  however,  and  it  may  be 
significant,  that  while  81  per  cent,  of  those  117  people  were 
able  to  identify  the  kind  of  product  from  the  name  of  the 
manufacturer,  only  66  per  cent,  were  able  to  identify  the  kind 
of  product  from  the  trade  name.  Further,  when  it  came  to 
connecting  the  manufacturer's  name  with  the  trade  name  ap- 
plied to  his  product,  only  28  per  cent,  succeeded,  and  37  per 
cent,  were  able  to  describe  the  trademarks  used  by  a  list  of 
well-known  concerns.  Strange  as  it  may  seem,  a  higher  aver- 
age was  attained  when  it  came  to  identifying  slogans,  45  per 
cent,  succeeding  in  doing  that  to  IVIr.  Cheney's  satisfaction. 

The  present  writer  has  no  intention  of  analyzing  the  results  in 
detail.  Such  a  process  would  instantly  involve  him  in  mathe- 
matical difficulties  of  considerable  magnitude,  and  this  article 
would  wind  up  in  the  realms  of  pure  speculation.  The  results 
are,  however,  given  at  some  length  for  just  exactly  what  they 
are  worth. 

Some  very  curious  replies  were  received  to  some  of  the  ques- 
tions. Thus,  Hamilton  was  identified  with  the  manufacture  of 
pianos,  soap,  silverware,  and  cotton  print;  Welch  with  watches; 
Peter's  with  firearms  and  medicine;  Lydia  Pinkham  with  sooth- 
ing syrup  and  talcum  powder;  Iver  Johnson  with  skates,  pianos, 
soap,  and  paint;  Heinz  with  spark-plugs;  Hart,  Schaffner  & 


J 


16  ADVERTISING  AND  THE  CONSUMER 

Marx  with  velvet,  candy,  pianos,  and  collars;  Beecham  with 
chewing  gum  and  bacon;  Colgate  with  socks,  mustard,  choc- 
olate, and  drugs;  Pabst  with  grape  juice,  tooth  paste,  soap,  and 
medicine;  Kellogg  with  Post  Toasties,  Cream  of  Wheat,  cold 
cream,  biscuit,  and  strawberries;  Skinner  with  pianos,  pills, 
and  be^ns:  and  Kleinert  with  pianos,  food  products,  draperies, 
scarfs,  and  Dutch  Cleanser.  •        d- 

Pompeian  was  described  as  a  soap  and  as  a  hair  dressing;  Big 
Ben  as  tobacco  and  cigars;  Prince  Albert  as  clothes,  biscuit, 
crackers,  and  cigars;  Aeolian  as  a  cream;  Koh-i-noor  as  a  mat- 
tress, a  tea,  and  a  diamond;  B.  V.  D,  as  corsets  and  garters; 
Alco  as  cleaning  material,  a  range,  and  a  dress  shield;  Zu  Zu  as 
breakfast  food  and  chewing  gum. 

Readers  of  Printers"  Ink  will  doubtless  remember  an  article 
by  R.  S.  Childs,  of  the  Bon  Ami  Company,  in  the  issue  of  July 
24,  1913.     Mr.  Childs  said:     "The  dear  old  Congregational 
minister  who  cooked  up  the  name   (Bon  Ami)   twenty-odd 
years  ago,  when  he  constituted  the  literary  element  among  the 
stockholders  of  a  little  country  soap  company,  knew  little 
about  advertising,  and  the  company  has  doubtless  been  to 
some  extent  the  victim  of  his  ignorance  ever  since.'*     Yet  in 
the  Cheney  experiment,  Bon  Ami  made  pretty  nearly  a  perfect 
score.     It  was  described  as  soap,  soap  powder,  cleaning  soap, 
cleaning  powder,  scouring  soap,  cleaning  polish,  glass  and  window 
cleaner,  and  washing  powder— all  of  them  near  enough  right  to 
be  counted.    Only  nine  men  and  one  woman  returned  no  answers 
at  all,  a  record  which  was  excelled  only  by  Uneeda  Biscuit.     ^^ 
Some  of  the  answers  to  the  question  "Who  makes  them?' 
are  as  follows:  Bon  Ami:  Orford  Soap  Company,  J.  T.  Robert- 
son Company.  Nabisco:  Sunshine  Biscuit  Company,  Nabisco 
Wafer  Company,  Dayton  Company.     Pompeian:  Colgate  & 
Co.  Big  Ben:  Hamilton  Company,  Waterbury  Clock  Com- 
pany, Big  Ben  Association,  National  Clock  Company,  Waltham 
Watch   Company,  Western  Clock  Company.     Keen   Kutter: 
American  Tool  Company,  Keen  Kutter  Company.    Aeolian: 
Steinert,  Aeolian  Piano  Player  Company.    Koh-i-noor:  Eagle 
Pencil  Company,  A.  W.  Faber  Company,  British  Graphite 
Companv,  Eberhard  Faber  Company,  American  Pencil  Com- 
pany.   B.  V.  D.:  Chalmers  Knitting  Company,  Erlanger  & 
Co.,  Boston  Underwear  Company. 

The  National   Lead   Company's  trademark  was  described 
as  a  lead  pencil,  a  paint  can,  and  a  painter;  Skinner's  Satin  was 


ADVERTISING  AND  THE  CONSUMER 


17 


credited  with  a  kitten  and  spool,  and  a  "girl";  Cream  of  Wheat 
with  "  I  want  some  more";  and  Fairy  Soap  with  "  It  floats." 

When  it  came  to  the  slogans,  "Ask  the  man  who  owns  one" 
was  credited  to  Ford,  Hamilton  Watch,  Cadillac,  Pierce  Ar- 
row, and  Gillette  Razors;  "It  hasn't  scratched  yet,"  to  Sapolio, 
Fairy  Soap,  and  "Chicken";  "You  dirty  boy,"  to  Fairy  Soap 
and  Gold  Dust;  "There's  a  reason,"  to  Kellogg;  and  "99x%V% 
pure,"  to  Pears'  borax,  whiskey,  Duffy  Malt  Extract,  Fairbank's 
soap,  Crisco  lard,  Fairy  Soap,  and  Heinz's  Pickles. 

Of  course,  the  answers  referred  to  above  are  only  scattering, 
and  the  great  majority  who  answered  the  question  at  all  an- 
swered fairly  correctly.  But  the  number  of  "No  replies"  to 
each  individual  question  is  astonishingly  high.  For  example, 
85  people  out  of  the  117  made  no  attempt  to  say  who  manu- 
factures Prince  Albert;  81  could  not  tell  the  owner  of  the  Keen 
Kutter  name;  80  were  stumped  on  Aeolian;  81  on  Velvet 
Tobacco;  29  on  Uneeda  Biscuit;  108  on  B.  V.  D.;  and  51  on 
Zu  Zu.  The  following  is  the  number  of  "No  replies"  to  the 
list  of  questions  under  the  first  heading,  "What  are  the  products 
manufactured  by  the  firms  using  these  names": 

Hanulton 29 

Oneida  Community 49 

Welch 19 

Peter's 18 

Lydia  Pinkham IS 

Gillette 8 

Ford 1 

Williams* 2 

Mellen's 8 

Waterman 2 

Pears' 5 

Fairbank's 5 

Skinner's 24 

Kleinert 71 

Tiffany 7 

Tver  Johnson 11 

Heinz 5 

Hart,  Schaffner  &  Marx 18 

Beecham IS 

Chalmers 20 

Colgate 8 

Campbell's 14 

Pabst 9 

Steinway 4 

Kellogg's 19 

National  Biscuit  Company' 9 


18 


ADVERTISING  AND  THE  CONSUMER 


m 


I 


As  stated  above,  the  results  of  this  experiment  may  not 
"prove"  a  blessed  thing.  Most  of  them  can  be  very  readily 
"explained,"  and  one  may  argue  about  them  till  the  cows  come 
home.     But  they  do  indicate  something,  which  is  this : 

There  is  no  concern  whose  trademark,  or  firm  name,  or  slogan, 
is  so  firmly  fixed  in  the  mind  of  the  average  consumer  that  it 
cannot  be  uprooted  or  transplanted.  It  is  indeed  a  remark- 
able tribute  to  advertising  that  so  large  a  proportion  of  those 
people  were  able  to  identify  and  describe  products  with  many  of 
which  they  had  probably  never  had  the  slightest  experience.  It 
indicates  a  tremendous  volume  of  good  will  which  has  been 
built  up  for  the  manufacturers  represented.  But  the  point 
is  right  here :  that  the  good  will  can  be  very  quickly  dissipated, 
or  transferred  elsewhere.  There  are  many  replies  in  the  doubt- 
ful column;  many  indications  that  competitors*  products  are 
confused;  many  "no  replies" — all  of  which  indicate  that  the 
advertisers  must  keep  hammering  away  without  ceasing  in 
order  to  keep  the  percentage  of  correct  identifications  as  high 
as  it  is. 

Perhaps  there  are  other  deductions  which  may  be  drawn  from 
the  experiment.  If  so,  the  results  are  given,  and  any  one  is  at 
liberty  to  put  upon  them  whatever  construction  he  pleases. 

(2)  THE  USE  AND  VALUE  OF  THE  GUARANTEE 

The  guarantee,  whether  it  takes  the  form  of  a  printed  prom- 
ise or  merely  of  a  reputation  for  fair  dealing,  is  really  at  the 
heart  of  the  relations  between  the  advertiser  and  the  consumer. 
This  fact  gives  more  than  passing  interest  to  the  following 
article  written  by  a  storekeeper  in  Baltimore: 

*The  main  cause  of  trouble  is  that  a  customer's  conception 
of  the  word  "guarantee"  is  mostly  different  from  that  of  the 
maker  and  retailer. 

If  the  guarantee  really  guaranteed  everything  that  could 
happen  to  the  article  it  accompanied  there  wouldn't  be  any- 
thing to  say.  But  in  many  cases  the  list  of  things  it  does  not 
cover  is  longer  than  the  enumeration  of  those  on  which  the 
manufacturer  will  make  good. 

'^  What  is  a  Good  Guarantee? "  By  Joseph  Katz  of  the  Hub,  Baltimore,  Md.« 
in  Priniers  Ink,  July  23,  1914.  p.  4. 


ADVERTISING  AND  THE  CONSUMER  19 

Let's  take  the  guarantee  conditions  that  are  printed  on  the 
inside  of  the  top  of  a  box  of  well-known  silk  gloves: 

RULES  GOVERNING  THE  EXCHANGE  OP  SILK  GU)VES 

1.  The  "Guarantee"  is  intended  to  cover  only  the  "TIPS"  of  the  gloves 
while  the  rest  of  the  glove  is  in  good  condition. 

2.  It  is  not  the  intent  of  the  guarantee  to  cover  iDorn-^td  gloves,  washed  gloves, 
gloves  cut  by  rings,  strained  gloves,  gloves  started  to  run  between  the  fingers 
usually  caused  by  FORCING  them  down  with  the  fingers  of  the  opposite  hand. 

3.  The  customer  MUST  SURRENDER  the  "guarantee  ticket"  from  the 
original  pair  as  well  as  the  ticket  from  the  new  pair  received  in  exchange.  THIS 
RULE  CANNOT  BE  DEVIATED  FROM  as  we  require  BOTH  tickets  in 
order  to  entitle  the  gloves  to  be  exchanged  by  us. 

A   WORD  OF   EXPLANATION 

The  object  of  the  "guarantee  ticket"  is  to  insure  the  wearer  that  the  "Tips'* 
WILL  WEAR  WELL  and  is  placed  in  each  pair  of  gloves  in  good  faith.  But 
the  silk  thread  from  which  a  silk  glove  is  made  is  by  nature  a  very  delicate 
fibre,  and  will  not  stand  the  abuse  to  which  a  silk  glove  is  frequently  subjected. 
Therefore  the  manufacturers  cannot  be  expected  to  exchange  gloves  that  do  not 
justly  come  under  their  guarantee. 

Now  here's  the  guarantee  ticket  that  the  customer  received 
with  the  gloves: 


GUARANTEE 

Blank's  Silk  Gloves  are  made  with  Double  Finger  Tips  and  are 

WARRANTED 
not  to  cut  through  or  wear  out  at  the  finger  ends,  with  reasonable  wear. 
In  Case  They  Should  while  the  Gloves  are  otherwise  in  good  condition, 
thwtt  upon  the  surrender  of  this  Ticket 

THEY  ARE  EXCHANGEABLE  FOR  A  NEW  PAIR 


OLH  GUARANTEE  DOES  NOT  COV^ER  GLOVES  THAT  HAVE, 

BEEN  WASHED 


There  are  a  few  more  conditions  on  the  "inside  cover*'  guar- 
antee than  there  are  on  the  individual  guarantee  the  customer 
gets. 

Now,  let*s  say  that  the  folks  who  issue  this  guarantee  are 
justified  in  imposing  those  conditions  from  the  standpoint  of 
sane  merchandising.     But  that's  not  the  point  with  the  dealer. 

The  saleswoman  passes  on  a  pair  of  these  gloves  and  says, 
"They're  guaranteed!"    She  doesn't  say  the  guarantee  says 


^|! 


20 


ADVERTISING  AND  THE  CONSUMER 


the  finger  tips  must  outwear  the  other  part  of  the  gloves  and 
that  it  does  not  cover  gloves  that  have  been  washed. 

Some  women  have  gloves  sent  home,  try  them  on  there,  tear 
them---and  still  ask  for  a  new  pair,  because  "They're  guaran- 
teed,   they  say. 

Once  the  word  "guarantee"  is  used,  the  store  must  make 
good— or  lose  a  customer,  whether  the  store  is  right  or  wrong 
Ihe  store  can't  stop  and  quibble  and  show  the  purchaser  the 
maker  s  list  of  the  things  that  are  not  covered  by  the  guarantee 

And  so  the  point  is  this:  A  store  would  rather  have  an  arti- 
cle without  the  word  "guarantee''  on  it  if  a  lot  of  strings  are 
tied  to  it.  ° 

Here's  a  guarantee  of  a  well-known  brand  of  hose  for  men 
and  women: 

This  hose  is  guaranteed  to  give  absolute  satisfaction.  If  it  wears  holes 
before  you  think  it  should,  return  to  us.  with  your  dealer's  name,  and  we  will 
give  you  a  new  pair  free. 

xJ^t^S'^  entirely  to  your  judgment  and  sense  of  fairness  as  to  the  service 
>ou  expect  from  this  hosiery. 

lK>oks  like  it  would  cover  everything,  doesn't  it?  Now 
read  the  slip  that  comes  with  it  with  the  exceptions: 

We  disclaim  responsibility  for  any  hose  that  may  be  damaged  as  foUows* 
Hose  purchased  m  too  smaU  a   size.    This  stretches  the  heel  beyond  iU 

noraml  size  and  pushes  the  toes  through  the  stocking. 

nff^.»f  V*^^^  caused  by  rough  naUs.  finger  rings,  or  cliapped  hands.    These 

Tk   ?    !Ik    ?^u^  !*^  '^'"^  ^"^  '^  ***  ^"'^^  *n*^  then^"  throughout 
tnr  length  of  the  stocking. 

thH';jfr\rU'^K-^5;  ^^'^'  ****^«^  ^  th«  ^^y  «f  the  stocking  instead  of 
the  garter  welt  which  is  specially  reinforced  to  withstand  strain 

Use  of  washing  powders  which  "kill"  the  silk  and  destroy  its  "life"  and 
weanng  qualities.     Ironing  with  a  hot  iron  which  scorches  and  "kills"  silk 
(Do  not  use  boiling  water  and  do  not  rub  soap  direct  to  fabric.     Launder  in 
lukewarm  suds  of  pure  soap  and  do  not  use  soap  containuig  alkali.) 
1^;nages  caused  by  the  above  are  not  faults  of  manufacture,  and  we  cannot 
be  held  responsible  for  them,  ^"«'«* 

wilV^ih^^Xic^'*"''*  ^  ""^"""^  ^'^^'  •'*"  '^••^^  ^«^"""g  ^~"»  perspiration 

Now  nine  times  out  of  ten  the  customer  doesn't  read  this  list. 

which  was  prmted  on  the  inside  of  a  folder  that  was  headed 

How  much  service  should  this  hosiery  give  you?"     Now  I 

am  not  saying  that  the  makers  are  not  justified  in  insisting  on 

these  restrictions.     But  I  do  say  that  they  contradict  the  word- 


ADVERTISING  AND  THE  CONSUMER 


21 


ing  on  the  guarantee  itself.  The  guarantee  on  the  hose  prom- 
ises everything  and  the  folder  makes  a  lot  of  exceptions. 
Lucky  for  us,  however,  these  people  are  unusually  liberal  in 
making  good. 

Note  the  first  exception  about  hose  purchased  in  too  small  a 
size.  Who  is  going  to  decide  whether  the  customer  bought  the 
right  size  or  not.^  What  store  would  want  to  argue  with  a 
customer  about  that.^ 

You  can't  stop  a  person  with  perspiring  feet  from  buying 
silk  hose.  And  yet  perspiration  will  rot  the  best  pair  of  silk 
hose  that  money  can  buy. 

But  say  "guaranteed" — and  the  customer  will  hold  you  to 
your  word.  You  can't  argue  with  her — she  thinks  she's  right, 
and  you  lose  a  customer  as  sure  as  you  are  born,  if  you  don't 
give  her  a  new  pair.  And  if  the  maker  doesn't  stand  back  of 
you,  and  he  doesn't  if  he  has  put  strings  on  the  guarantee, 
you'll  find  the  guarantee  on  hose,  gloves,  and  the  like  a  boome- 
rang instead  of  an  advantage. 

Our  buyer  of  women's  hosiery  told  me  of  a  customer  who 
came  back  complaining  of  a  pair  of  hose  that  were  rubbed  out 
at  the  heel  because  her  shoes  were  not  properly  fitted — and  so 
the  hose  rubbed  through,  due  to  the  constant  friction  of  the 
hose  against  the  inside  of  the  shoe  in  walking. 

When  he  told  her  it  was  more  the  fault  of  the  shoe  than  the 
hose,  she  ejaculated,  "What  is  the  guarantee  for,  anyway.?" 
We  had  to  give  her  a  new  pair — or  lose  a  customer. 

Another  buyer  here  said  that  if  a  woman  were  to  buy  a 
guaranteed  article  and  on  her  way  home  a  brick  were  to  fall 
from  some  building  in  course  of  construction  and  damage  that 
article,  she  would  bring  it  back. 

I  wish  manufacturers  had  a  vivid  conception  of  how  unrea- 
sonable many  customers  are  when  bringing  back  merchandise. 

A  department  store  executive  has  this  to  say  in  Women's 
Wear: 

BIG   STORE3   ARE    .\.FR.VID   OF  THEIR  CUSTOMERS 

Another  thing  is  the  department  stores  are  afraid  of  their  customers.  They 
let  women  who  buy  of  them  do  anything  they  like.  If  you  get  a  complaint 
from  a  man  and  you  fix  it  up  for  him  it  promotes  a  kind  of  good  feeling  on  hi« 
part,  and  the  next  time  some  little  thing  happens  to  be  not  just  as  he  would 
like  It  he  passes  it  over  for  he  feels  friendly  toward  your  store,  but  not  so  with 
the  women.  You  let  a  woman  do  a  thing  once  and  she  regards  it  as  her  priv- 
uege  ever  after.     Why.  I  know  of  stores  where  a  woman  who  ha«  been  allowed 


n 


ADVERTISING  AND  THE  CONSUMER 


ADVERTISING  AND  THE  CONSUMER 


^ 


, 


i 


a  credit  of  $i  on  a  pair  of  shoes  that  did  not  give  satisfaction  has  expected  a 
credit  on  every  other  pair  of  shoes  she  bought,  and  verj*  often  she  gets  it. 

The  department  stores  are  afraid  to  resist  this  sort  of  thing.  They're  afraid 
to  lose  a  few  customers  even  when  they  could  easily  satisfy  themselves  that  this 
sort  of  trade  is  a  losing  game. 

I  don't  know  about  it  being  a  losing  game.  But  I  do  know 
when  a  customer  thinks  he  or  she  is  right,  he  or  she  might  as 
well  be  right  for  all  practical  purposes,  because  you'll  lose  the 
customer  if  you  don't  do  what  he  or  she  wants  you  to  do. 

A  customer  bought  a  sheer  silk  dress  at  our  store  in  March  of 
last  year.  She  wore  that  dress  through  a  terrific  hot  spell 
right  into  the  month  of  October.  An  entire  side  of  the  dress  was 
stained  with  perspiration.  She  hadn't  even  worn  dress  shields 
— and  yet  she  said  she  wanted  a  new  dress  or  her  money  back. 

The  point  is  this:  If  a  woman  will  do  this  with  an  article 
that  had  no  printed  guarantee  with  it,  what  will  she  do  when  she 
is  given  the  guarantee  with  an  article? 

The  guarantee  with  men's  clothing  is  not  vital.     A  man 
expects  to  get  good  wear  out  of  a  suit  of  clothes;  and  if  it  doesn't 
satisfy,  every  good  store  will  make  good  without 
^^""^    quibbling. 

Guaraniee       There  are  not  many  makes  we  handle  that  have 

guarantees  with  them,  although  we  have  found  that 

every  maker  will  make  good  on  suits  that  have  not  rendered 

satisfaction — whether  they  have  printed  guarantees  with  them 

or  not. 

Here's  the  guarantee  that  goes  with  Hart,  Schaffuer  &  Marx 
clothes: 

OUARjiNTEE 

You  are  entitled  m  buying  Hart,  Schaffner  &  Marx  Clothes  to  a  most  Pom- 
tive  Assurance  of  your  Satis^ction. 

Every  dealer  in  ovr  clothes  is  authorized  to  say  this  to  you: — 

Every  garment  made  by  and  bearing  the  label  of  Hart,  Schaflfner  &  Marx  is 
Guaranteed  to  be  of  All-Wool  or  Wool  and  Silk  fabrics  with  no  "mercerized" 
or  other  cotton  added;  to  be  Thoroughly  Slu'imk  before  cutting;  seams  sewed 
with  Pure  Silk  Thread;  tailored  in  Clean,  Sanitary  Shops;  and  to  be  free 
from  every  defect  of  material  and  workmanship. 

More  than  that:  The  Dealer  is  authorized  to  say  that  if  the  Clothes  are  not 
right,  or  not  satisfactory,  your  money  will  be  rt^fimded. 

Now  tliat's  a  go(xl  example  of  a  guarantee  that  really  means 
something. 
And  so  is  this  a  good  guarantee  for  hose : 


WE  OUAHANTEE 

that  these  six  pairs  of  Holeproof  Hose  will  need  no  darning  for  six  months.    If 
they  should,  we  agree  to  replace  them  by  new  ones  upon  the  surrender  of 
this  ticket  with  the  worn  pair  and  Coupon  A,  provided  they  are  returned  to 
us  within  six  months  from  date  of  sale  to  wearer. 
Signature  of  Dealer  . 

And  that's  all  there  is  to  it.    The  hose  are  sent  to  the  maker 
— and  back  comes  a  new  pair. 

So  let's  sum  up:  We  like  guarantees  that  will  cover  the  cus- 
iomer*s  conception  of  a  guarantee^  and  the  latter's  idea  of  one  is 
pretty  broad.  Once  a  maker  uses  the  guarantee  without  any 
"ifs"  to  it,  he  must  stand  ready  to  make  good,  even  the  unrea- 
sonable complaint,  because  no  store  can  afford  to  argue  with  a 
customer. 

A  portion  of  this  article  was  sent  by  Printers*  Ink  to  a  num- 
ber of  widely  known  manufacturers  who  have  employed  the 
guarantee  and  a  number  of  other  selling  plans,  and  it  was  accom- 
panied by  the  following  list  of  questions : 

1 .  Do  you  think  that  Mr.  Katz's  view  of  what  a  good  guar- 
antee is,  is  right,  and  why  ?    If  not,  why  not  ? 

2.  Judging  from  your  own  experience,  is  it  good  business  for 
a  manufacturer  to  accompany  his  guarantee  by  "an  explana- 
tion" or  "bill  of  exceptions.'*"  (See  first  and  second  examples 
cited  by  Mr.  Katz.) 

3.  Is  your  guarantee  an  outright  one,  or  do  you  make  some 
clearly  stated  reservations.'*    With  what  result? 

4.  Have  you  ever  found  it  advisable  to  change  the  wording 
of  your  guarantee?    What  were  the  circumstances? 

5.  Have  you  heard  from  your  dealers  or  your  consumers  in 
any  way  that  would  throw  light  upon  the  points  raised  in  the 
article? 

6.  Do  you  believe  a  manufacturer  can,  with  justice  to  him- 
self and  the  consumer,  give  a  guarantee  short  of  the  ideal  one 
described  in  the  last  paragraph  of  the  article? 

This  list  of  questions  brought  out  replies  from  twenty-five 
manufacturers  who  in  the  main  agreed  that  the  guarantee  has 


1 


«4  ADVERTISING  AND  THE  CONSUMER 

no  value  unless  it  takes  the  form  of  a  plain,  unequivocal  agree- 
ment to  "make  good"  any  purchase  the  consumer  finds  un- 
satisfactory.* 

(3)   THE   CHANGES  IN  THE  CONSUMER  AND  IN 
CONSUMING  CONDITIONS 

The  most  conspicuous  feature  of  the  relation  between  the 
advertiser  and  the  consumer  is  the  fact  that  so  far  as  the  con- 
sumer is  concerned  nothing  whatever  is  stable.  Most  of  the 
rest  of  this  compilation  will  be  devoted  to  some  of  the  elements 
of  instability  and  change  which  are  conspicuous  in  the  distrib- 
uting organization  and  in  the  advertiser's  problems,  but  in 
addition  to  these,  there  are  countless  elements  of  change  in  every 
market.  For  example,  GeorgeL.  Sullivan  brings  out  the  following 
points  covering  some  changes  in  the  automobile  market  result- 
ing from  the  general  downward  tendency  of  automobile  prices. 
Each  drop  in  price  changes  the  size  and  character  of  the  manu- 
facturer's market : 

t  .  .  .  I  do  not  think  there  ever  has  been  an  opportunity 
like  the  present  one  for  manufacturers  to  watch,  right  out  in  the 
open  for  all  to  see,  the  vital  play  and  interplay  of  the  forces  of 
market-making. 

About  a  year  ago,  at  the  time  the  cyclecar  threatened  to 
invade  the  automobile  market,  a  very  shrewd  observer  of  auto- 
mobile conditions  in  this  country  made  this  remark: 

**The  trouble  with  us  in  this  country  is  that  we  began  to 
build  automobiles  at  the  top  of  the  pyramid  of  prices.  The 
little  section  at  the  top  of  the  pyramid  was  quickly  filled.  Then 
makers  began  to  realize  that  the  nearer  they  approached  the 
base  of  the  pyramid  in  prices  the  wider  they  increased  their 
angle  of  possible  customers,  and  with  every  reduction  of  $100 
or  $200  in  any  model,  they  made  it  possible  for  a  constantly 
increasing  proportion  of  Americans  to  purchase  automobiles.'* 

Automobiles  since  their  first  manufacture,  or  more  correctly 

^Prinleri  Ink,  July  23.  1914.  p.  3,  and  July  SO.  1914,  p.  66. 

fPnn/m'  In/:.  July  29,  1915,  p.  26. 


ADVERTISING  AND  THE  CONSUMER 


25 


after  a  period  covering  two  or  three  years  immediately  follow- 
ing the  inception  of  the  industry,  have  had  a  constant  tendency 
to  drop  in  price.  The  betterment  of  the  product  has  kept  con- 
stant pace  with  this  downward  trend  in  prices,  so  that  to-day 
it  is  possible  to  buy  an  automobile  fully  equipped,  with  every- 
thing that  the  owner  may  desire,  at  about  one  third  the  price 
he  would  have  been  asked  for  a  less  perfect  product  even  five 
years  ago,  and  to  which  he  would  have  had  to  add  as  extras, 
and  at  an  additional  expense,  such  things  as  windshield,  top, 
horn,  speedometer,  etc. 

With  every  succeeding  season  the  public  asks  itself  how  much 
lower  the  automobile  can  go  and  still  be  worth  buying.     Enor- 
mous productions  and  standardization  of  manufacture 
„J^*       have  been  largely  responsible  for  the  reduction  in 
Sbn      P"ces.     It   is   obvious   that   when   a   manufacturer 
Price       turns  out  300,000  units  all  exactly  alike,  his  overhead 
Drops      per  unit  and  cost  of  materials  and  labor  are  very  low 
in  comparison  to  similar  charges  against  any  one  of  a 
number  of  models. 

This  multiplicity  of  models  was  the  cause  a  few  years  ago  of 
nearly  wrecking  one  very  large  manufacturer  who  was  very 
well  known.  VVhen  the  reorganization  committee  took  hold 
of  the  proposition  they  insisted  that  the  number  of  models 
should  be  reduced  from  over  60  to  12.  To-day  that  concern 
is  in  a  more  healthy  sound  condition  than  ever  before. 

The  reduction  of  prices  this  year  has  made  a  very  deep  im- 
pression on  the  buying  pubhc.  A  car  that  has  been  selling  for 
two  seasons  at  $1,075  has  been  reduced  to  $750.  It  is  identi- 
,  cally  the  same  car.  Another  model  selling  at  $1,550  has  been 
reduced  to  $1,350.  This,  too,  is  identically  the  same  car  as  at 
the  higher  price.  This  reduction  has  been  duplicated  in  many 
instances. 

The  question  must  inevitably  arise  in  the  mind  of  the  man 
who  paid  $1,550  as  to  whether  or  not  he  had  furnished  the  manu- 
facturer, distributor,  and  dealer  an  unjust  profit.  And  this 
question  may  be  truthfully  answered  "no,"  because  at  the  time 
he  purchased  his  car  the  cost  of  production  at  the  factory  was 
proportionately  higher  than  at  the  present  time. 

Another  question  which  comes  up  to  every  thinking  man  at 
the  present  time  is  this:  What  is  the  significance  of  the  pres- 
ent reduction  in  price  and  what  will  be  its  effect  in  the  purchase 
of  an  automobile.?    The  first  significance  of  it  has  been  touched 


26 


ADVERTISING  AND  THE  CONSUMER 


ADVERTISING  AND  THE  CONSUMER 


27 


on  above,  i.  e.,  the  ability  of  the  manufacturer  to  produce  at 
less  cost  and  his  willingness  to  give  his  purchaser  the  ability  to 
buy  a  better  product  at  less  cost^ 

Probably  the  next  significance  of  it  is  the  effect  it  will  have  on 
the  second-hand  car  market.  The  dealer  will  suffer  some  in- 
trinsic lack  of  profit,  perhaps  not  in  percentage  but  in  actual 
money,  which  will  force  him  to  efforts  toward  a  greater  sale. 
At  the  same  time  it  will  make  him  very  cautious  about  taking 
in  second-hand  cars  as  partial  payment  for  new  cars.  This 
will  result  in  the  owner  of  a  second-hand  car  being  dissatisfied 
with  the  deal  offered  him  by  the  dealer,  and  he  will  decide 
in  many  instances  to  run  his  present  car  another  season  at 
least. 

On  the  other  hand,  it  will  bring  into  the  market  a  great 
host  of  people  who  have  long  desired  to  own  an  automobile 
and  who  now  find  it  within  their  power  to  purchase  a  new  car. 
In  other  words,  the  angle  of  the  pyramid  will  have  progressed 
near  enough  its  base  to  have  included  them  in  its  purchasing 
power.     .     .     , 

What  the  insurance  companies  would  call  "actuarial  figures" 
show  that  this  country  can  absorb  between  six  and  seven  hun- 
dred thousand  new  cars  every  year. 

This  observer  points  out  that  the  production  of  a  million 
cars  means  a  production  of  one  car  for  everj^  one  hundredth 
person  of  the  entire  population  of  the  United  States — man, 
woman,  and  child.  Based  on  the  average  life  of  a  car  of  three 
years,  and  taking  into  consideration  the  growing  tendency 
for  a  man  to  keep  his  car  more  than  one  season,  these  figures 
would  provide  one  new  car  a  season  for  every  thirty-third  person 
of  the  entire  population  of  the  United  States — man,  woman,  and 
child.  He  predicts  an  enormous  overproduction,  and  it  is  not 
expected  that  foreign  conditions  will  better  themselves  suffi- 
ciently soon  to  make  the  foreign  market  a  dumping-ground  for 
any  of  this  surplus. 

Already  some  of  the  larger  manufacturers  have  grasped  this 
fact  and  have  curtailed  their  original  plans  for  enormous  pro- 
ductions. In  one  case  a  concern  making  10,000  cars  this  year 
announces  75,000  for  the  coming  year,  but  have  cut  that  to 
50,000.  Even  with  these  reductions,  this  man  thinks  that  there 
will  be  a  great  overproduction. 

Every  year  the  automobile  is  coming  to  be  more  certainly  a 
utility.    The  man  who  drives  50  miles  into  the  country  of  a 


Sunday  afternoon  and  50  miles  back  is  not  nearly  as  numerous, 

with  the    exception   of   the  enthusiastic    brand-new    owner, 

as  he  was  a  year  ago.     He  is  going  back  to  his  golf, 

AutonuMe    hjg  tennis,  his  gardening,  or  his  quiet  Sunday  at  home, 

^g^     and  the  car  stands  in  the  garage  or  is  used  to  bring 

Utility       bis  guests  from  the  station  only. 

A  striking  instance  of  this,  which  is  developing 
all  over  the  country,  is  observed  in  a  very  smaU  Jersey  town. 
This  year  eight  men  whose  average  income  is  not  over  $4,000 
a  year  have  purchased  automobiles.  They  are  used  almost 
entirely  by  the  women  of  the  families  to  run  over  to  the 
county  town  for  shopping  and  to  the  neighboring  golf-courses 
for  a  round  of  golf.  But  these  cars  are  used  very  little  by 
the  men.  Perhaps  not  more  than  once  a  week  for  the  mere 
sport  of  riding  somewhere  and  coming  back. 

I  look  to  see  automobile  selling  and  advertising  proceeding 
from  now  on  with  some  degree  of  certainty  as  to  possible  de- 
mand. Every  well-wisher  of  the  industry  can  ask  nothing 
better  than  that  automobiles  be  sold  on  their  utility  basis,  for 
being  so  sold,  they  will  in  the  main  be  sanely  sold. 

One  other  illustration  of  the  extreme  changeability  of  a 
market  is  to  be  found  in  the  effects  upon  certain  markets  pro- 
duced by  the  pursuit  of  sales.  This  is  illustrated  by  the  fol- 
lowing unsigned  article,  describing  how  an  optical  company 
developed  a  new  field.  It  shows  how  a  market  sometimes  grows 
by  being  appealed  to. 

*About  four  years  ago  a  man  holding  a  prominent  position 
in  one  of  the  great  American  steel  industries  walked  into  the 
office  of  the  Julius  King  Optical  Company,  New  York,  with  an 
unusual  request. 

"I  want  you  to  make  us  some  safety  goggles,"  said  he,  "for 
our  workmen." 

At  that  time  the  market  was  flooded  with  goggles  of  the 
crudest  nature:  clumsy  affairs  with  thick  glass,  wire  netting 
goggles  which  ruined  a  man*s  eyesight,  their  makeshifts  of 
isinglass  which  shattered  at  the  lightest  tap,  and  dozens  of 


*Pnnter3*  Ink,  February  11,  1915.  p.  33. 


V 


28 


ADVERTISING  AND  THE  CONSUMER 


ADVERTISING  AND  THE  CONSUMER 


29 


barbarous  contrivances  made  without  regard  to  the  health, 
comfort,  or  appearance  of  the  workman. 

The  Julius  King  Optical  Company,  in  its  capacity  of  handling 
a  wholesale  jobbing  optical  business,  sold  various  of  these  im- 
ported models  without  having  a  very  clear  conception  of  the 
field  or  its  needs.  In  a  general  way  the  oflBcials  knew  that  the 
annual  sale  of  glass  eyes  ranged  in  the  neighborhood  of  from 
^0,000  to  30,000;  but  where  this  large  number  of  glass  eyes 
went  was  an  unknown  problem.  That  people  lost  the  use  of 
their  eyes  was  accepted  as  a  matter  of  course,  but  at  that  time 
little  attention  had  been  paid  to  tracing  where  the  false  eyes 
\\^nt  and  what  causes  had  been  responsible  for  the  destruction 
of  eyesight. 

Acting  upon  the  request  previously  stated  the  company  began 
to  experiment  with  the  safety  goggle  proposition  with  a  view 
of  making  radical  improvements  over  the  crude  imported  types, 
and  as  the  work  progressed  many  interesting  and  undreamed  of 
things  came  to  light. 

For  example,  it  was  discovered  that  the  annual  toll  of  eyes 
sacrificed  in  the  industries  of  this  country  was  great.  In  this 
country  alone  there  are  over  80,000  blind  men  who  owe  their 
loss  of  vision  to  the  fact  that  their  eyes  were  not  protected,  and 
It  was  disclosed  that  40  to  50  per  cent,  of  the  accidents  taking 
place  in  industrial  plants  were  eye  accidents. 

Figures  like  these  were  significant,  and  as  the  market  pos- 
sibilities of  the  safety  goggle  began  to  be  unfolded  the  company 
plunged  deeper  into  the  subject,  with  especially  keen  interest 
when  It  was  realized  that  the  great  majority  of  these  accidents, 
with  their  attendant  suffermg,  pecuniary  and  economic  loss,  were 
mexcusable  and  unnecessary. 

Standing  on  the  threshold  of  what  looked  to  be  an  unde- 
veloped branch  of  the  optical  business  the  company  had  much 
^         to  learn,  and  the  market  was  carefully  investigated 

Field  Un-  ^°  ^^4^^  *^  ^^  ^^^  ^^^  ^^^^^  standing  of  the  goggles 
developed  ^^^^  in  "se.  It  was  found,  as  the  result  of  a  thor- 
ough canvass,  that,  except  in  raije  instances,  opera- 
tives in  most  lines  of  industry  carried  on  their  work  without 
special  means  of  guarding  their  eyes  from  particles  of  abrasive 
and  flying  steel  chips,  rivet  heads,  and  other  objects,  menacing 
the  unguarded  eye.  Employers  of  labor  were  for  the  most  part 
indifferent  toward  extending  the  use  of  eye-protectors  in  their 
shops,  and  as  far  as  the  men  themselves  were  concerned  the 


attitude  bordered  almost  on  antagonism.  There  seemed  to  be 
a  prejudice  against  wearing  goggles  while  at  work;  users  claimed 
that  the  practice  hurt  their  eyes,  shut  out  their  light,  and  did  a 
hundred  and  one  other  things.  A  certain  small  percentage 
wore  the  various  ungainly  makeshifts  then  on  the  market,  but 
the  majority  preferred  to  "take  chances.** 

It  was  soon  seen  that  there  were  two  factors  to  the  si)ectacle 
problem:  first,  securing  suitable  sf)ectacles;  second,  getting 
them  worn.  As  far  as  the  first  factor  was  concerned  the  Julius 
King  Optical  Company  reasoned  that  it  had  this  branch  of  the 
problem  solved.  As  regards  the  second  factor,  it  was  realized 
that  the  success  of  the  "Saniglas"  goggle  depended  upon  the 
result  of  a  campaign  of  education  brought  to  bear  upon  both 
employer  and  employee. 

It  was  just  about  this  time  that  the  "Safety  First"  crusade 
touched  the  shores  of  this  country  on  its  way  from  Europe  and 
started  to  sweep  a  broad  path  through  the  great  industries. 
Nothing  could  have  been  better  than  this  for  the  spreading  of 
the  gospel  of  eye  protection,  and  the  company  made  the  most 
of  it,  riding  the  crest  of  the  wave. 

While  a  great  deal  of  the  educational  work  was  done  by  per- 
sonal solicitation,  advertising  played  a  great  part  in  the  cam- 
paign— and  the  same  conditions  hold  good  to-day. 

Naturally  the  subject  enabled  a  collection  of  very  striking 
material  to  be  accumulated,  not  the  least  important  of  which 
were  photographs  by  the  score  of  workmen  minus  an  eye. 
While  affording  an  unpleasant  sight  the  evidence  was  extremely 
forcible  and  photographs  of  this  nature  were,  and  are,  used  in 
all  sorts  of  ways  and  combinations.  Metal  hangers  for  shop 
use  were  made  to  reproduce  some  of  the  most  startling  examples, 
and  catalogues  and  booklets  pictured  the  results  of  not  wear- 
ing goggles.  Very  important,  also,  were  pictures  secured  of 
goggles  which  had  been  broken  on  the  job,  yet  which  had  saved 
an  eye.     .     .     . 

In  this  campaign  of  education  the  company  is  being  helped 
to-day  by  a  form  of  publicity  of  the  most  valuable  kind  which 
has  its  origin  in  the  safety  department  of  some  of  the  great 
industrial  companies.  Many  industrial  concerns,  among  them 
being  the  American  Car  and  Foundry  Company  and  the  New 
York  Central  Lines,  furnish  safety  goggles  free  of  charge  to 
their  workmen;  the  two  companies  mentioned  using  the  "Sani- 
glas"  goggle.    These  companies  issue  educational  booklets  of 


so 


AD\TRTISING  AND  THE  CONSUMER 


their  own  for  distribution  among  their  men,  urging  them  to 
wear  goggles  while  at  work.  While  the  trade  name  of  the  goggle 
IS  not  mentioned,  the  Julius  King  Optical  Company  secures 
practically  as  much  benefit  as  if  it  issued  the  literature  itself. 

Twenty  thousand  copies  of  a  bulletin  were  issued  by  the 
American  Car  and  Foundry  Company.  The  front  cover  of  this 
bafety  Bulletin,  as  it  is  called,  bears  the  injunction—"  This 
bulletin  IS  an  appeal  to  the  workmen  for  their  co-operation  in 
preventing  eye  accidents.     Take  this  home  with  you." 

The  bulletin  itself  is  largely  pictorial.  A  page  shows  a  series 
of  four  pictures  tellmg  the  story  of  a  chipper  in  a  foundry  who 
was  handed  a  pair  of  safety  goggles  by  his  foreman.  Rather 
than  wear  them  the  workman  fastened  them  to  his  hat,  an 
accident  happened  and  the  final  picture  shows  him  coming  out 
^l  1  ?  *\^spital.  The  bulletin  is  full  of  just  such  vivid  evidence- 
the  kind  that  grips  the  reader  and  sets  him  busy  thinking.     . 

Much  more  might  be  told  of  the  manner  in  which  the  com- 
pany IS  winning,  as,  for  example,  the  practice  of  fitting  special 
prescnption  lenses  into  the  frames  in  order  that  each  wearer 
may  have  the  glass  exactly  suited  to  his  vision.  It  is  service 
of  this  order  which  is  winning  the  men  in  the  shops  and  foundries 
away  from  the  old  idea  that  goggles  were  merely  blinders  and 
incidentally  increasing  their  efficiency  25  to  50  per  cent. 

There  are  twelve  Saniglas  salesmen  on  the  road,  visiting 
plants  in  all  parts  of  the  country  and  doing  missionary  work. 
These  salesmen  report  visits  in  full,  and  from  them  much  valu- 
able data  is  secured  which  is  used  in  advertising.  It  is  almost 
impossible  to  go  into  any  plant  in  the  country  and  not  pick  ud 
a  good  "eye  story."  ^ 


(4)    THE  NEED   OF  CLOSE  CONTACT  BETWEEN  ADVERTISER 

AND   CONSUMER 

It  is  obvious  that  with  the  distributor's  direct  dependence 
upon  the  consumer  and  with  the  constant  change  which  is 
going  on  in  consumer  conditions,  it  is  necessary  for  the  adver- 
tiser to  keep  in  close  touch  with  what  the  consumers  think  of 
his  goods.  Ernest  Cohn,  Advertising  Manager  of  the  Kahn 
Tailoring  Company  of  Indianapolis,  Ind.,  discusses  this  as- 
pect of  the  question  as  follows: 


ADVERTISING  AND  THE  CONSUMER 


31 


*A  number  of  years  ago  an  enterprising  machinist  hit  upon 
one  of  those  happy  ideas  which  are  both  patentable  and  sal- 
able and  started  out  in  a  small  way  as  a  manufacturer.  Gradu- 
ally extending  his  business,  he  finally  assumed  the  place  where 
his  advertising  required  the  assistance  of  exi>erts. 

The  fact  that  the  proportionate  increase  was  even  better 
after  the  organization  of  his  advertising  department  than  it 
had  been  in  those  old  days,  when  he  himself  had  done  every- 
thing about  the  shop  from  assisting  the  shipping  clerk,  helping 
out  the  assembler,  and  running  the  ads,  made  him  believe  that 
his  publicity  was  now  100  per  cent,  efficient. 

What  was  his  surprise,  therefore,  when  one  day  a  large 
user  of  his  invention  said  to  him,  "Mr.  Blank,  I  have  often 
wondered  why  you  don't  advertise  the  fact  that  your  machine 
not  only  does  the  punching  and  stamping  claimed  for  it, 
but  is  useful  also  in  handling  intricate  folds  of  metal  which 
otherwise  have  to  be  made  with  slower  and  less  satisfactory 
appliances." 

Now,  as  a  matter  of  fact,  Mr.  Manufacturer  had  never 
known  or  dreamed  that  his  product  had  uses  with  which  he 
was  unfamiliar.  The  idea  had  been  the  child  of  his  own  brain, 
and  had  been  his  pet  through  the  years  of  its  development  and 
exploitation.  Surely  no  one  could  be  mare  familiar  with  it 
than  he  was.  And  yet,  though  this  machine  had  been  origi- 
nated for  a  certain  specific  purpose  and  all  the  advertising 
and  sales  literature  had  been  promulgated  with  that  one  use 
in  mind,  it  had  remained  for  a  user  to  call  the  attention  of  the 
inventor  to  a  new  field  of  usefulness  for  the  contrivance — a 
field  which  opened  up  new  possibihties  for  the  advertising  de- 
partment and  new  activities  for  the  sales  department. 

Naturally  the  inventor — his  faith  in  his  full  familiarity  with 
his  product  badly  shaken — made  a  hurried  trip  to  the  shop  of 
his  informing  customer  and  saw  his  machine  in  actual  operation 
on  work  to  which  he  had  never  thought  it  could  be  adapted. 
After  that  he  sent  his  advertising  experts  on  the  same  errand, 
and  as  soon  as  the  story  of  the  new  discovery  was  correctly 
told  throughout  the  trade,  he  found  his  sales  were  increasing 
in  two  channels. 

First,  he  found  that  he  could  sell  additional  machines  to 
plants  already  using  a  limited  number,  because  the  increased 


*Printers'  Ink,  January  8,  1914,  p.  86. 


i^ 


32  ADVERTISING  AND  THE  CONSUMER 

use  of  the  machine  along  the  new  lines  made  it  imperative  for 
shops  which  were  now  using  their  present  equipment  to  the 
fuUest  capacity  for  the  purposes  for  which  it  had  been  originally 
purchased  to  install  additional  ones  to  take  care  of  the  new 
work. 

In  the  second  place,  he  found  it  was  possible  to  get  his  prod- 
uct adopted  by  people  who  previously  had  no  use  for  it  as  it 
A  Cknnn.    1^^  descnbed  in  the  original  advertising  matter- 
In  r^f    ^"*  /^^'^d  they  could  not  do  without  it  after  the 
the  Remedy  revelations  made  m  the  newer  copy.     For  example. 
Here       there  were  some  shops  which  could  not  use  the  machine 
t        I.-  1.         cutting  and  stamping,  but  which  had  urgent  need 
for  a  high-speed  metal-bending  machine. 

By  exploiting  both  uses  the  firm  both  lined  up  new  customers 
and  increased  the  buying  capacity  of  those  old  users  who  were 
susceptible  to  the  fullest  use  of  the  machine. 

This  man  did  not  stop  there.  He  arranged  his  oflBce  affairs 
so  that  he  could  get  away  on  a  short  trip  and,  donning  a  pair  of 
overalls  secured  jobs  incog,  in  a  number  of  shops  in  his  territory. 
♦  i"'"l"^]H'^,^^  ''?^  difficult,  since  he  made  his  wants  knoT^ 
to  the  heads  of  the  plants,  although  to  their  workmen  he  ranked 
no  differently  than  any  other  shop  employee. 

By  this  means  he  succeeded  in  learning  a  number  of  tricks 
which  users  of  the  machine  had  put  it  to,  and  which  he  never 
would  have  known  had  he  continued  in  the  old  rut  of  directing 
his  business  without  inquiring  into  what  others  knew  about  his 
product,     \\hat  he  learned  by  this  method  not  only  served  to 
mcrease  sales,  but  gave  a  new  impetus  to  the  publicity  of  the 
company  in  that  it  gave  the  advertising  department  new  things 
to  talk  about— that  ever-welcome  opportunity  to  spice  up  the 
pu^city  and  make  the  ads  tell  a  continued  stoiy. 
.    pf  course,  not  every  large  advertiser  has  to  be  shown  that  it 
IS  to  his  interest  to  learn  what  others  know  about  his  goods  and 
not  all  need  to  employ  subterfuge  in  doing  it. 

For  instance,  numbers  of  food  manufacturers  maintain  their 
own  experimental  laboratories  for  the  discovery  of  new  uses  and 
combinations  of  then-  products,  while  others  achieve  the  same 
results  by  interesting  cooking  schools  and  culinary  authorities 
as  well  as  by  offering  prizes  to  housewives  for  new  and  practical 
recipes  m  which  their  product  is  specified.  Thus  they  manage 
to  secure  the  proper  viewpoint,  that  is,  the  consumer's  viewpoint, 
in  regard  to  their  wares.  ^ 


ADVERTISING  AND  THE  CONSUMER 


3S 


One  food  manufacturer,  however,  hit  upon  a  very  novel  plan — ■ 
much  less  expensive  than  the  ordinary  one.     He  was  a  manu- 
facturer of  a  package  brand  of  cornstarch.     For  some 

Cooks       time  he  had  felt  that  his  product  could  be  given  a 

reW  o/      wider  use  in  kitchens  which  would  result  in  increasing 
for  *^*    ^^cs  if  he  could  but  devise  new  recipes  for  it  and  new 
Cornstarch    uses  to  which  it  could  be  put. 

He  hit  upon  the  very  simple  plan  of  hiring  and  re- 
hiring cooks,  all  of  whom  were  given  a  short  reign  in  his  kitchen, 
and  to  all  of  whom — through  his  wife — without  letting  them 
know  that  he  was  in  that  business — he  gave  instructions  to 
prepare  a  variety  of  cornstarch  dishes.  By  encouraging  the 
originality  of  his  successive  cooks  and  by  affecting  a  keen  en- 
joyment of  each  new  cornstarch  combination,  he  really  put  a 
premium  on  the  origination  of  new  cornstarch  recipes. 

Of  course  his  plan  was  rather  hard  on  the  cooks,  but  by  means 
of  connections  which  he  formed  with  an  employment  agency  he 
managed  to  let  them  down  easily  by  finding  new  places  for  them 
as  necessity  arose.  And  at  the  end  of  his  cook-hiring  experi- 
ment he  found  that  he  had  learned  more  about  his  product  than 
he  had  ever  known  before.  A  brand-new  cookbook  entitled 
"  New  Cornstarch  Dishes  That  Tempt  the  Palate"  was  the  result. 

One  feature  of  learning  what  the  user  knows  about  your  goods 
may  not  be  immediately  apparent  to  the  casual  reader,  but  on 
second  thought  it  is  easily  discernible.  For  if  it  is  possible 
through  the  user  of  your  goods  to  learn  good  things  about  them 
it  is  also  possible  through  them  to  put  your  finger  on  serious 
flaws  which  may  not  be  readily  apparent  to  the  manufacturer 
and  his  force  (and  which  may  be  retarding  the  growth  of  sales) 
thus  giving  you  the  opportunity  to  repair  them. 

For  instance,  a  manufacturer  of  a  new  office  device  found  that 
though  it  was  an  easy  matter  to  make  original  sales  for  a  single 
machine  it  was  extremely  difficult  to  close  deals  whereby  he 
could  later  entirely  equip  large  offices  with  his  device.  This 
was  the  case  in  spite  of  the  fact  that  the  sales  force  repeatedly 
made  the  assertion  that  something  was  holding  back  complete 
office  installations,  and  no  one  could  lay  his  finger  on  the  reason. 
There  seemed  to  be  no  discoverable  objection  against  the  ap- 
pliance, yet  for  some  reason  or  other  there  was  not  that  decisive 
approval  of  the  device  which  would  get  it  used  throughout 
large  offices  in  spite  of  the  expense  attached  to  the  installation 
of  a  complete  equipment. 


S4 


ADVERTISING  AND  THE  CONSUMER 


As  is  usually  the  case,  the  fact  that  the  first  machines  sold 
readily  was  taken  as  conclusive  evidence  that  the  product  was 
good.  And  the  fact  that  it  was  impossible  to  close  larger  deals 
was  also  taken  as  unquestioned  evidence  that  both  the  adver- 
tising department  and  the  sales  force  were  at  fault.  One  shrewd 
salesman,  however,  finally  made  up  his  mind  that  though  the 
machine  looked  good  on  demonstration,  for  some  reason  or  other 
it  had  not  w  orked  right  when  put  to  the  actual  test  of  continuous 
normal  working  conditions. 

For  this  reason  he  asked  an  indefinite  vacation  and  improved 

his  time  by  finding  employment  in  an  oflBce  in  which  a  trial 

machine  had  already  been  installed.     Here  he  could, 

^muSe     ^^'^^  ^^^  *^  ^^^'  watch  its  operation  and  manipula- 

Waa  Dis-    *^®"*     finally   he   discovered   that    the  reason  the 

covered  machine  did  not  go  well  after  the  first  demonstration 
was  because  the  shifting  of  a  single  lever  was  more  or 
less  a  clumsy  operation  and  served  as  a  sort  of  "mental  hazard" 
or  unconscious  handicap  to  the  acquisition  of  ease  and  speed  of 
operation.  This  had  not  actually  prevented  the  acquiring  of 
speed,  but  it  had  discouraged  it. 

Thus  it  is  seen  that  it  is  important  to  know  what  the  user 

knows  about  your  goods,  not  only  because  by  finding  new  uses 

for  them  you  can  extend  their  field  and  liven  up  their 

Ascertain'   advertising,  but  also  because  if  your  product  has  any 

*«me?«     faults  or  apparent  drawbacks  which  the  user  knows 

Viewpoint   and  which  it  is  possible  to  repair,  not  only  will  that 

knowledge  be  the  open  sesame  to  further  success,  but 

the  lack  of  it  will  be  found  to  be  an  actual  stumbling-block  in 

the  path  of  sales  progress.    And  a  change  for  the  better  always 

puts  a  fresh  incentive  back  of  the  advertising — ^giving  it  the 

pleasant  aspect  of  change  and  progress. 

And  indeed  the  consumer's  vie^T)oint  does  not  always  come 
as  an  accidental  inspiration  from  without.  Those  cases  are 
the  exceptions.  The  man  who  knows  best  what  the  user  knows 
about  his  product  is  the  one  who  finds  it  out  by  means  of  careful 
and  cautious  investigation  and  by  the  affable  "mixing"  with 
the  ckvss  of  people  who  actually  use  the  article.  Thus,  some 
manufacturers  of  machinery  make  it  interesting  to  a  few  bright 
employees  to  keep  on  good  terms  with  mechanics  who  actually 
use  their  product.  Other  organizations  keep  investigators 
travelling  all  the  time  "butting  in"  at  stores  where  their  wares 
are  handled  and  calling  on  people  who  use  them — not  to  sell 


ADVERTISING  AND  THE  CONSUMER  35 

goods,  but  just  to  see  how  things  are  running  and  to  leam,  if 
possible,  something  new  about  the  product. 

Methods  employed  by  certain  manufacturers  for  keeping  m 
touch  with  the  market  are  described  in  an  unsigned  article  as 
follows : 

*"I  am  the  complaint  clerk  for  this  business,"  said  the  pres- 
ident of  a  pretty  large  corporation  to  a  Printers'  Ink  representa- 
tive. "By  that  I  mean  to  imply  there  is  nothing  so  important 
in  this  entire  business  as  the  proper  handling  of  customers  who 
for  any  reason  whatever  have  become  disgruntled.  I  figure 
that  every  old  customer  should  produce  five  new  ones.  I 
spend  more  in  advertising  to  get  rriy  first  sale  than  the  profit 
actually  amounts  to.  Therefore,  if  I  don't  get  those  five  addi- 
tional sales,  my  advertising  has  been  a  losing  investment. 

"Not  only  that,  but  complaints  enable  me  to  keep  my  finger 
on  the  pulse  of  every  department  of  the  business.  If  the  factory 
superintendent  relaxes  his  watchfulness,  if  the  delivery  depart- 
ment grows  careless,  if  some  of  the  salesmen  promise  too  much 
for  the  sake  of  forcing  a  sale,  my  record  and  analysb  of  com- 
plaints flashes  a  warnrng  signal.  Instead  of  regarding  dis- 
satisfied customers  as  a  nuisance  and  keeping  as  far  aloof  from 
their  kicks  as  possible,  I  insist  upon  knowing  the  details.  I 
want  to  know  whether  a  certain  class  of  complaints  is  increasing 
or  decreasing.  I  want  to  know  whether  we  can  improve  our 
goods,  our  packing,  our  selling  methods,  etc.,  and  so  I  go  on  a 
still  hunt  for  complaints  rather  than  try  to  shut  them  off." 

In  the  last  statement  particularly  is  indicated  a  modern 
tendency  of  successful  business.  Captains  of  industry  now- 
adays are  not  waiting  for  complaints  voluntarily  to  put  in  an 
appearance.  Scouts  are  being  sent  out  to  unearth  complaints 
that  might  otherwise  never  be  heard  of.  Sometimes  adver- 
tisements are  so  adroitly  worded  as  to  invite  the  sending  in  of 
complaints.  And  then,  when  received,  they  are  not  handled 
perfunctorily  by  a  cheap  subordinate,  but  are  analyzed  and 
tabulated  by  some  person  of  good  judgment  who  is  capable  of 
reading  out  of  them  fundamental  principles  of  vital  importance 
to  the  growth  of  the  entire  business.     .     .    • 

*Print6r3'  Ink.  February  26.  1914,  p.  85. 


'36 


ADVERTISING  AND  THE  CONSUMER 


The  cases  quoted  are  all  typical  big  businesses,  but  the  les- 
sons they  convey  can  be  utilized  to  a  greater  or  less  extent  by 
every  manufacturer  or  merchant  who  has  dealings  either  di- 
rectly or  indirectly  with  the  great  consuming  public. 

The  establishment  of  '*service"  departments,  which  are  in 
their  essence  departments  for  the  handling  of  complaints  and 
the  satisfying  of  complainants,  has,  under  some  form  or  other, 
become  a  regular  feature  of  these  organizations. 

In  them  complaints  are  received,  settled,  analyzed,  classified, 
and  recorded,  and  from  such  a  department  the  various  other 
branches  of  the  organization  are  notified  of  the  troubles  and 
their  causes,  and  such  conclusions  are  drawn  as  will  best  insure 
greater  efiiciency  for  the  future. 

Such  an  organization  may  sound  formidable,  but,  in  practice, 
a  very  small  staff  under  a  capable  head  will  do  a  surprising 
amount  of  effective  work,  and  those  firms  which  have  tried  out 
the  system  thoroughly  are  generally  convinced  that  it  is  a  pay- 
ing proposition  in  every  sense  of  the  word. 

Complaints  readily  divide  themselves  into  classes,  and  one 
will  often  resemble  another  so  closely  that  the  same  treatment 
fits  them  both. 

The  New  York  Telephone  Company  finds  that  its  main 

causes  of  complaints  usually  take  stereotyped  lines — delayed 

or  imperfect  connections,  defects  in  appliances,  re- 

How  Some    moval  and  installation  troubles,  and  disputed  toll 

Telephone     charges 

Are  To  facilitate  dealing    with    them    the    company 

Handled     has  located  district   managers   in   various  parts  of 
the  city,  and  through  these  offices  the  various  trou- 
bles are  traced  and  suitable  explanations  or  adjustments  fur- 
nished. 

To  trace  actual  examples:  A  writes  indignantly  to  complain 
he  has  not  had  his  new  telephone  installed.  Reference  to 
the  file  shows  that  sufficient  time  has  not  been  given  for  the 
work  to  have  been  done.  The  complainant  has  the  facts 
courteously  placed  before  him  and  is  usually  pacified. 

B  claims  he  did  not  make  a  certain  call  charged  against  him. 
The  toll  slips  are  examined  and  date,  time,  and  place  established. 
Usually  this  suffices,  but  occasionally  the  reply  is  that  the 
alleged  party  called  is  unknown,  and  in  such  cases  compromise 
is  the  only  way  out. 

C  could  not  get  a  number  promptly,  and  here,  said  Mr. 


ADVERTISING  AND  THE  CONSUMER 


37 


King,  manager  of  the  Murray  Hill  District  office,  is  our  most 
common  source  of  complaint.  Turning  to  the  switchboard, 
he  showed  convincingly  how  much  easier  it  is  to  give  an  im- 
mediate connection — ^just  a  few  mechanical  movements  and 
it  is  done — whereas  any  failure  means  three  or  four  rings  and 
usually  a  heated  but  one-sided  argument  from  the  party  mak- 
ing the  call. 

"We  find  it  easier  and  cheaper  to  avoid  complaints  than  to 
give  cause  for  them,"  continued  Mr.  King,  "and  I  am  pleased 

to  say  that  courteous  attention  and  careful  explana- 
Adxeriinng  |.Jqq  ^f  ^j^^.  causes  usually  prove  effective."  In 
%^V^^  fact,  this  company  is  going  a  step  further  and  pur- 

poses  usmg  the  advertismg  columns  of  the  daily  press 
for  the  purpose  of  "heading  off  complaints  by  pointing  out 
how  the  public  themselves  can  assist  in  the  giving  of  better 

service." 

Express  companies  have  come  in  for  a  considerable  share 
of  public  opprobrium,  and  it  is  by  no  means  surprising  to  find 
that  they  are  beginning  to  realize  that  it  is  better  to  meet 
justifiable  complaints  frankly  and  to  make  friends  with  the 
public  by  such  improvements  in  their  service  as  seem  called  fox 
by  their  own  experience. 

Claims  for  delay,  loss,  and  damage  have  formed  a  hea\y 
percentage  of  an  express  company's  expenses,  and  it  is 
with  the  double  view  of  settling  claims  promptly  and  of  also 
eliminating  the  causes  that  the  Wells,  Fargo  Company  has 
during  the  past  year  inaugurated  a  service  department  with 
E.  H.  Stevens,  an  experienced  express  superintendent,  at  the 
head,  and  offices  in  New  York,  Chicago,  St.  Louis,  San 
Francisco,  Los  Angeles,  and  Houston,  each  under  an  experienced 
manager. 

Mr.  Stevens  thinks  the  public  feeling  has  been  that  it  was 

almost  useless  to  complain  to  an  express  company  unless  one 

had  a  "pull'  because  of  the  great  quantities  sent  by 

How  One    express,  but  realizing   that  this  unsatisfactory  rep- 

Company    utation    meant    actual    loss    of    business,    the    new 

Is  Utilizing  departure  is  based  on  equitable  lines,  the  policy  being 

Complaints         ^  •      .     i    •  -j.  •  4. i 

to  Further    to  pay  every  just  claim  as  soon  as  it  is  presented. 

Eficiency  To  gain  any  real  benefit,  however,  it  was  felt  that 
the  department  must  endeavor  to  locate  the  trouble 
and  eliminate  it.  One  of  the  means  adopted  is  that  of  a  travel- 
ling  squad  of   "inspectors."    These  men  visit  points  where 


S8 


AD\^RTISING  AND  THE  CONSUMER 


troubles  are  frequent,  find  out  the  causes,  and  straighten  them 
out.  IVIr.  Stevens  pointed  out  that  every  claim  meant  a  dis- 
tinct loss  in  money,  and  that  not  infrequently  the  fault  was 
directly  traceable  to  the  error  of  an  employee  of  the  company. 
"If  that  is  so,  we  want  to  know  it  and  either  educate  the  man 
to  the  proper  way  of  liandHng  the  traffic  or  else  put  a  competent 
man  in  his  place."  These  ideas  are  brought  prominently 
before  every  employee  in  the  MessengeVy  a  monthly  house-organ 
which  is  chiefly  made  up  of  helpful  and  instructive  talks  on 
better  service  and  kindred  subjects. 

Before  leaving  the  subject  of  public-service  corporations  it  is 

interesting  to  note  that  at  the  national  conference  of  commercial 

gas   managers,   held   at   Philadelphia   in   December, 

The  Wide   special  attention  was  given  to  this  subject,  a  com- 

inServLe    ^^^^^  being  appointed  to  investigate  and  its  report 

Work  made  the  occasion  for  an  extremely  spirited  session, 
wherein  the  conviction  was  almost  imiversally  ex- 
pressed that  the  old  "public  be  damned"  attitude  was  dead, 
and  that  from  all  points  of  view  it  paid  to  study  out  consumers' 
complaints  and  to  trace  and  remedy  the  causes. 

The  committee  was  made  penr.anent  and  was  further  en- 
trusted with  the  task  of  preparing  textbooks  of  instruction 
on  the  subject  for  the  use  of  employees  of  the  various  com- 
panies. 

Turning  from  this  class  of  corporation  to  another  group  which 
also  deal  at  close  quarters  with  the  user,  we  find  that  manu- 
facturers of  the  various  machines  so  common  in  our  offices  find 
it  essential  to  their  business  to  keep  in  touch  w  ith  their  customer? 
after  the  sale  and  to  use  every  care  to  insure  satisfactory 
service. 

Many  of  the  typewriter  companies  maintain  an  inspection 
service  which  insures  that  every  machine  in  use  shall  be  visited 
periodically,  cleaned  and  adjusted.  They  further  give  free 
instruction  to  operators  in  the  care  of  the  machines,  and,  in 
addition,  maintain  a  corps  of  skilled  repairmen  to  look  after 
more  serious  troubles. 

All  this  is  done  with  the  sole  view  of  avoiding  cause  for  com- 
plaint and  may  be  classified  under  the  head  of  "Service."  It 
is  admittedly  expensive,  but  even  at  that  it  is  claimed  to 
pay  better  than  leaving  the  customer  to  shoulder  his  own 
troubles. 

The  Burroughs  Adding  Machine  affords  another  striking 


ADVERTISING  AND  THE  CONSUMER 


39 


11 


example  of  service  to  customers.  So  far  is  its  maker  from 
waiting  for  complaints  that  a  fully  equipped  service  de- 
partment is  kept  constantly  on  the  move,  and  as 
"Service"  a  rule  every  machine  sold  is  visited  three  or  four  times 
^"wyl^  a  year  at  least. 
Burroughs       ^o  sooncr  is  a  sale  made  than  it  is  recorded  on  a 

Uses       service   card,   with   number   and   kind   of   machine, 
date  of  sale,  and  all  details. 

Prospective  users  are  carefully  instnicted  in  the  use  of  the 
machine  at  the  start,  and  a  few  days  after  delivery  a  letter  is 
sent  asking  if  everything  is  satisfactory,  or,  if  not,  for  details 
of  the  trouble. 

Sometimes  this  arises  from  the  ignorance  of  the  operator, 
the  omission  of  some  simple  operation,  or  even  occasionally 
from  the  fact  that  the  machine  purchased  is  not  exactly  suited 
to  the  work  required,  all  of  these  being  quite  outside  the  ques- 
tion of  defects  in  the  machine  itself,  but  the  same  care  is  taken 
in  each  instance  to  leave  the  customer  absolutely  satisfied. 

Typical  of  still  another  class  of  business,  in  the  Aeolian 
Company  of  New  York  we  find  still  the  same  tendency. 

Its  problem  is  slightly  different  from  those  already  cited, 
although  the  results  are  practically  the  same.  To  sell  a  highly 
technical  instrument  like  a  player-piano  to  a  public  compara- 
tively unused  to  mechanical  devices  of  any  kind  requires  con- 
siderable tact  and  care,  not  only  in  the  original  sale,  but  in 
the  after  handUng  of  the  customer. 


f 


(Customer's  Name)                                                        Date No. 

Defective  Part 

Bought 19.. 

From 

Finished  Product 

Sold 19.. 

To 

Made 19.. 

By 

Shipped 19.. 

Route 

Packed 19.. 

By 

Reported 19 . . 

By 

Remarks 

Complaint 

Oaim 

FRONT  OF  CARD — ^RECORD  OF  GOODS 


«  ADVERTISING  AND  THE  CONSUMER 


Complaint  Settled. 
How 


Amt.  $. 


Fault  of 

How  dealt  with. 


Claim  made  on . 
How  settled . . . 


Amt.  $. 


19. 


Remarks. 


Net  loss  $. 


BACK  or  CABD — ^RECORD  OF  COMPLAINT 

These  deteils  would,  of  course,  be  subject  to  alteration  as  required  bv  the 
Fac^^^'fo^"^'"'-    Th«  card  has  been  used  successfully  by  a  STr  ZJZ 

Although  every  improvement  has  been  adopted  to  render 

the  mstrument    fool-proof."  there  are  yet  certain  adjustments 

j^'    »     ?/^^   ^^l^anical  attachments  which   require  to   be 

Pdi^lf   *^^'^"gWy  understood  before  entire  satisfaction  can 

Looking  ODtamed. 

After  To  "head  off"  trouble  as  far  as  possible  is,  there- 

Purchasers  fore,  the  aim  of  the  Aeolian  Company's  service  de- 

partment,  and  a  free  instructor  is  sent  to  the  user's 

home  to  show  the  entire  family,  if  necessaiy,  how  to  operate 

the  instrument  properly.     The  service  record  cards  are  also 

I!ff .1?  T  Z^  ""  /^^?^-"P  system  for  the  sale  of  music  rolls 
as  well  as  for  keeping  in  touch  with  the  condition  of  the  instru- 
™S  i         P^ss^^v  leading  up  to  an  exchange  for  a  more  recent 

«^^f!!  would  be  possible  to  go  from  one  field  to  another  and 
add  to  the  hst  of  firms  which  have  adopted  the  practice  of 
headmg  off  their  complamts  by-to  use  an  Irishism-taking 
care  of  them  before  they  happen.  It  all  points  to  the  growing 
tendency  among  manufacturers  to  profit  by  their  own  mistakes 
and  to  elunmate  the  cause  as  far  as  possible 

It  is  claimed  by  the  makers  of  National  Cash  Registers  that 
many  of  theu-  most  important  improvements  were  suggested 


ADVERTISING  AND  THE  CONSUMER 


41 


by  users  who  found  the  regular  type  of  machine  did  not  do  what 

they  wanted.     So  with  almost  any  business.     It  is  not  sufficient 

merely  to  settle  a  claim  or  silence  a  complaining  cus- 

How  Cash-  tomer.     There   is   something  at  the  back  of  every 

Yf£s     complaint,  or  it  would  never  have  been  made,  and 

Profited  by  when   these  are   sufficiently   numerous  in  any  one 

Complaints  direction  to  indicate  some  defect  in  the  product,  every 

investigation  should  be  made  of  the  cause  and  every 

endeavor  made  to  remedy  it. 

Some  of  the  greatest  advances  of  recent  years  have  been 
evolved  out  of  some  apparently  trivial  cause  of  complaint,  and 
this  applies  not  only  to  cash  registers,  but  to  typewriters,  add- 
ing machines,  and  almost  every  modem  domestic  or  business 
appliance. 

Every  reader  of  Printers'  Ink  owes  it  to  himself  to  look  into 
this  question  of  complaints.  If  there  are  many  of  them,  get  a 
full  report  on  each,  dig  down  for  the  cause,  and  ten  to  one  the 
remedy  will  not  be  far  away. 

Even  the  apparent  laxity  or  want  of  interest  among  employees 
has  sometimes  a  deeper  foundation  than  just  laziness  or  cussed- 
ness,  and  a  little  "gum  shoe"  work  along  these  lines  may  prove 
a  permanent  blessing,  even  if  in  the  disguise  of  a  disgruntled 
customer. 

The  manufacturer  who  desires  to  systematize  his  complaints 
or  to  create  such  a  service  department  with  a  view  to  the  im- 
provement of  his  product  has  no  need  to  set  up  an  elaborate 
organization. 

All  that  is  required  is  a  small  card  index  to  carry  a  set  of 
cards  classified  according  to  the  particular  lines  on  which  the 
complaints  are  found  to  run. 

These  need  not  be  larger  than  five  by  three  inches  or  six  by 
four  inches,  and  a  set  of  500  cards  in  various  colors  will  fill  a 
single  drawer  file.  The  colors  are  suggested  as  a  means  of 
classifying  the  cards  according  to  the  fault  complained  of,  thus 
showing  at  a  glance  whether  any  particular  form  of  complaint 
is  more  or  less  prevalent  at  any  particular  time. 

Thus,  a  selection  of  pink  cards  could  be  taken  instantly 
from  the  file,  showing  convincingly  not  only  what  this  partic- 
ular fault  happened  to  be,  but  also  who  was  responsible. 

By  means  of  dividing  index  cards,  they  could  be  further 
classified  into  groups  by  territories,  or  in  such  other  form  as 
might  be  desired.    For  instance,  a  jobber  might  require  to 


42 


(r  1 


ADVERTISING  AND  THE  CONSUMER 


ascertainable.    Any    system    «HonLr    ^  "^"""^^  ^  ^^^'^^ 

which,  encouraged  by  the^^sTof  it«  ^^f^^  'company, 
has  added  a  "Holep%of "  rin^»fc5t  ?,  holeproof"  hosiery, 
that  a  certain  sS^rcfntlL^?  Zt  '"^a  '^ ^  '^'^'"«' 
wityn  the  limits  of  tKa^MP^  Knf  ^^^  ^^^  ^«"  ""» 
replaced,  the  effect  to  tKSuS;  "sVsImTa:"  Zv  C 
not  proven  defectivp   whu^  *u^  •  .     *^  "  *^^y  *iad 

setuLent  oHXU'st  Sui  K^h^  '^l^A.}!'' 
improvmg  the  quality  of  their  produces  "  "^  ^"'*^^' 

naJfrdirLlterriTltSon""^^^^^  °"">^  '«' 

by  one  &m  that  at  the  ZSt T Ifw^A       ^^'*  '^?^  ««lmitted 

it  was  claimed  th:tthX'^l"'^J:ilZ^^Zni:T^'^' 
more  than  made  up  in  the  Inn^^^JTk    •  f*^  "**'•  *»«"'g 

that  by  a  gradua?r:duct!o^^f  X  ^^ J^f'^^^ -71-;  -^ 
percentage  had  been  considerably  reduc^^dth^rfir*-*'"' 
had  also  greatly  increased  through  "he  system  tLfi^^'f"! 
ce^  to  regard  it  as  an  expense  item  at  alF       '  ^^  ^"^  ^"^ 

mtl^L:^rr^,rr^T:rSL^^LT£^^^^^^^  v  *^^  «™^ 

mvestment,  a  service  depart^"ent^^Vpa?in?XS"  ^" 

fhJ!r^'*'P*'iT  '"^'"^^^  <=oncerning  the  relations  between 
he  advertiser  and  the  public  make  it  clear  that  ability  to  i^e 

iJlZTr  "^"^r  "*"  ""^-^t-^ding  of  the  en'^nnoli; 
complicated  senes  of  processes  involved  in  the  distribution  o^ 


ADVERTISING  AND  THE  CONSUMER 


43 


merchandise  under  present-day  conditions.  No  matter  how 
high  the  advertiser's  moral  standards  may  be  or  how  sincere 
may  be  his  desire  to  make  his  advertising  of  real  service,  a 
failure  to  adjust  his  plans  or  adapt  his  methods  to  the  distri- 
bution processes  may  thwart  him. 

No  one  connected  with  advertising  to-day  possesses  all  the 
knowledge  necessary  to  make  his  operations  perfectly  sure. 
But  the  body  of  knowledge  which  is  available  to  advertisers, 
large  or  small,  rich  or  poor,  is  increasing  constantly. 


i| 


CHAPTER  n 


PROGRESS  IN  RETAIL  ADVERTISINa 

THE  retailer,  as  the  immediate  source  of  the  consumer's 
purchases,  figures  in  advertising  problems  chiefly  in 
two   ways:     (1)  As   an   independent   advertiser,    and 
(2)  As  a  feature  in  national  campaigns. 

As  an  independent  advertiser  we  shall  consider  at  this  point 
only  the  so-called  "regular"  retailer.  Department-store  adver- 
tising and  other  forms  of  advertising  by  large  retailers  we  shall 
leave  for  consideration  at  another  point.  The  small  "regular" 
retailer  depends  for  his  continued  existence  upon  his  ability  to 
serve  the  consumer  in  matters  of  personal  contact  and  conveni- 
ence. This  puts  all  the  emphasis  in  retail  operations  of  this 
kind  upon  service  and  economy.  If  the  small  "regular"  re- 
tailer is  able  to  render  for  the  consumer  the  services  which  are 
expected  of  him  and  do  it  at  a  price  which  the  consumer  is 
willing  and  able  to  pay,  he  will  be  able  to  compete  with  other 
forms  of  retailing.  If  he  is  not,  he  must  expect  to  be  eliminated. 
As  an  independent  advertiser,  therefore,  this  type  of  retailer 
finds  his  problems  intimately  associated  with  questions  of 
operating  costs. 

As  a  feature  in  national  campaigns,  the  "regular"  retailer's 
problems  are  concerned  partly  with  his  relations  to  his  sources 
and  partly  with  his  abihty  to  compete  with  other  forms  of 
retail  distribution.  These  latter  competitive  relations  are  so 
complicated  that  it  will  be  necessary  to  devote  separate  chap- 
ters to  a  number  of  them.  In  this  chapter,  however,  our  at- 
tention will  be  confined  to  the  problems  of  the  "regular"  retailer 
as  an  independent  advertber. 


PROGRESS  IN  RETAIL  ADVERTISING 


45 


(1)   THE  PLACE  OF  ADVERTISING  IN  BETTER  RETAIL  METHODS 

During  the  past  few  years  marked  progress  has  been  made  in 
bettering  the  methods  of  retailing.  Conspicuous  among  the 
methods  employed  in  the  betterments  which  have  been  brought 
about  is  advertising  by  the  retailer  himself.* 

In  the  year  1914  System  published  a  series  of  articles  on 
"keeping  up  with  rising  costs,"  which  contained  a  large  number 
of  figures  on  retail  costs,  prepared  under  the  direction  of  Wheeler 
Sammons  of  the  System  Staff,  f 

This  series  of  articles  has  been  followed  by  a  new  series 
relating  the  experiences  of  progressive  merchants  in  attempting 
to  meet  the  problems  discussed.  These  have  app)eared  in 
practically  every  issue  of  System  since  October,  1914.  Several 
of  these  merchants  in  reporting  their  experiences  mention  in- 
creased speed  of  turnover  as  one  of  the  most  effectual  methods 
of  meeting  the  problem  of  rising  costs,  and  a  number  of  them 
recount  in  detail  their  experiences  with  advertising  as  a  method 
for  increasing  the  speed  of  turnover.  For  example,  in  the  first 
article  of  the  series,  Carl  J.  Ricker,  President  of  the  firm  of 
S.  F.  Ricker  &  Son,  Jewellers,  of  Emporia,  Kansas,  describes 
^ve  methods  which  he  has  employed  in  meeting  the  rising  costs. 
Of  these,  three  have  to  do  with  advertising.    He  says: 

t  ...  In  this  article  I  am  going  to  describe  in  detail 
five  of  the  broad  policies  I  have  used.  They  are,  (1)  adver- 
tising focused  on  specific  classes  of  customers;  (2)  special  ad- 
vertising plans;  (3)  advertising  connected  with  local  events; 
(4)  frequent  trips  to  the  primary  markets;  and  (5)  watchful- 
ness  for  new  lines. 

*The  Harvard  Graduate  School  of  Business  Administration  through  its 
Bureau  of  Business  Research  has  developed  a  standard  system  of  accounting 
for  boot  and  shoe  stores  and  for  grocery  stores,  and  these  systems  have  served 
as  the  basis  for  accumulating  a  large  amount  of  valuable  material  on  the  costs 
of  operating  retail  business.  Further  information  concerning  these  may  be 
secured  by  addressing  the  Bureau,  No.  1,  Lawrence  Hall,  Cambridge,  Mass. 

tThis  series  has  been  brought  together  in  a  book  bearing  the  same  title 
that  the  articles  had  originally.    This  book  is  for  sale  by  the  System  Company. 

XSystem,  October,  1914,  p.  S78. 


46 


PROGRESS  IN  RETAIL  ADVERTISING 


PROGRESS  IN  RETAIL  ADVERTISING 


47 


First,  then,  come  my  ideas  and  practices  associated  with 

directing  advertising  so  that  it  hits  hard.     System's  cost  investi- 

gations  indicate  that  on  the  average  retailers  spend 

r^r"^  from  one  half  of  1  per  cent,  to  4  per  cent,  of  then- 
Advertising  ^?^^  ^^r  advertising  of  one  sort  or  another.  I  be- 
heve  this  item  in  the  cost  of  doing  business  is  increas- 
ing as  fast  as  most  of  them.  At  any  rate,  they  tell  me  about 
advertising  expenses  of  the  eighties  that  rarely  exceeded  1 
per  cent,  of  the  sales. 

I  imagine  my  early  experiences  with  advertising  are  typical. 
I  advertised  rather  as  a  matter  of  course.  If  I  had  not  worked 
out  methods  for  bettering  the  returns  I  guess  that  I  would  have 
gradually  come  to  consider  direct  profits  from  the  space  I 
bought  little  short  of  miracles.  Judging  from  the  amount  of 
time  they  give  to  their  advertising,  I  believe  a  good  many 
retailers  have  actually  given  up  expecting  results.  They 
are  in  the  habit  of  spending  money  for  advertising,  but  con- 
sider it  a  very  bad  habit.  So  they  hold  that  the  less  time  they 
give  to  the  spending  the  better. 

Certainly  I  had  enough  discouraging  advertising  adventures 
before  I  found  the  **how'*  of  influencing  my  customers  and 
discovered  that  the  advertising  bills  could  be  used  to  buy  weapons 
mighty  effective  in  fighting  rising  costs.  I  spent  from  twenty-five 
to  fifty  dollars  at  a  time,  in  the  early  days,  advertising  absolutely 
staple  goods  at  less  than  cost.  I  failed  to  get  a  single  reply. 
Finally  the  truth  of  the  matter  simmered  down  to  the  fact  that 
I  used  newspaper  space  liberally  because  I  was  afraid  to  quit. 

I  tried  large  space  and  I  tried  small  space.  The  story  was 
about  the  same  every  time — very  few,  if  any,  returns.  I 
keyed  the  advertisements  in  order  to  establish  the  pulling  power 
of  each  medium.  For  instance,  I  spent  thirty-five  doUars  on 
an  advertisement  to  go  in  five  papers,  keyed  so  that  we  could 
tell  just  what  each  one  did.  A  paper  with  one  hundred  and 
fifty  circulation  sent  three  answers;  another  with  two  thousand 
readers  pulled  but  one!  And  I  might  add  that  I  netted  about 
ten  dollars  on  the  goods  sold  as  a  result,  which  left  me  twenty- 
five  dollars  in  the  hole. 

Of  course,  I  would  not  Hke  to  say  that  the  business  did  not 
benefit  indirectly  from  the  advertising.  Occasionally  some 
one  wandered  into  the  store  and  referred  to  our  advertising  in 
a  general  way.  But  as  a  rule  it  was  rather  difl5cult  to  put  my 
finger  on  direct  benefits  from  the  money  I  paid  out  for  space 


in  the  newspapers,  signs  in  the  post  oflSce  and  the  hotels,  ad- 
vertisements in  theatre  programs,  and  "cards'*  in  school  papers. 

Gradually  I  became  convinced  that  I  was  doing  too  much 
mere  "announcing,"  as  they  call  advertising  in  New  England, 
and  far  too  little  real  advertising  with  a  definite  sales  pulling 
power.  Then  I  worked  out  my  plan  for  focusing  a  profit- 
able portion  of  my  advertising  appropriation  on  specific  groups 
of  customers.  The  remainder  of  my  advertising  funds  I 
decided  to  connect  up  with  special  sales  plans.  Naturally 
a  small  amount  still  went  into  lifeless  "announcing,"  but  not 
any  more  than  I  could  help.  I  had  found  a  way  to  make  my 
advertising  both  announce  that  S.  F.  Ricker  &  Son  existed 
and  fight  rising  costs  by  actually  pulling  sales.  The  experts  will 
tell  you  that  all  good  advertising  does  that,  but  I  am  afraid  the 
average  retailer  does  more  "announcing"  than  real  advertising. 

Here  I  am  telling  exactly  how  I  carried  out  the  task  of  focusing 
my  advertising  expenditure — the  first  of  the  five  plans  described 
in  the  article.  It  cost  me  more  than  three  thousand  dollars  to  find 
the  way.  First  of  all,  I  decided  that  personal  contact  with  pros- 
pective customers  is  the  best  kind  of  advertising.  But  it  was 
evident  I  could  not  spend  my  time  advertising  exclusively  byword 
of  mouth — and  keep  the  sheriff  away — though  I  haveencountered 
retailers  whom  I  believe  are  endeavoring  to  do  so. 

Next  I  convinced  myself  that  I  shoi3d  use  a  large  share  of 
the  money  I  had  been  spending  on  "announcements"  to  pay 
for  advertising  through  the  mails  with  lists  focusing 
^^^ng     n^y  offers   on   the   right   class   of  customers.     This 
Advertising  ^^^^  ?  ^^^  ^^re  than  newspaper  space,   but  I  hit 
Personal    hard  just  where  I  wanted  to  hit.     By  mail,  I  reasoned 
with  myself,  you  can  talk  almost  personally,  certainly 
in  the  style  you  usually  use,  and  while  the  customer  is  reading 
your  letter  he  is  not  looking  for  news.     It  is  true  that  for  ex- 
tensive campaigns  direct  mailings  generally  cost  too  much  to 
be  used,  but  I  am  a  retailer  interested  in  exciting  a  limited  sales 
area.     Moreover,  my  lessons  from  my  direct  advertising  ex- 
periences taught  me  how  to  make  my  newspaper  advertise- 
ments effective  as  sales  stimulants. 

Furthermore,  in  most  places  letters  get  into  the  home  and 
every  member  of  the  household  old  enough  to  do  so  at  least 
glances  at  them.  If  they  are  well  gotten  up,  they  pass  as  per- 
sonal communications  in  the  average  house.  Of  course,  you 
would  not  be  deceived  by  a  form  letter— still,  take  a  glance  at 


n 


!l 


48  PROGRESS  IN  RETAIL  ADVERTISING 

th«  second  or  third  paragraphs  of  some  of  the  letters  you  have 
received  recently  from  the  factories  before  you  agree  with  me  too 

i^S'fc^'  ?^  "^f  Ti  ^^  '^'  faeihtie^  modern  o^^^ 
equipment  affords  it  is  not  difficult  to  turn  out  form  letters 
that  the  general  run  of  American  families  will  consider  personal 
I  here  are  several  other  advantages  to  using  some  of  your 
advertising  appropriation  on  direct  advertising.  Your  com- 
petitors, for  example  do  not  know  what  you  are  featuring  when 
you  advertise  through  the  mails,  unless'^some  one  hap^rto 
tell  them  or  they  are  wise  enough  to  arrange  to  secure  your 

lA%J^^^t''  \  ^'"T^  advertising  you  can  hold  a  spLial 
sale  limited  to  those  to  whom  you  write  and  those  theytell. 
It  is  exceedingly  easy  to  extend  special  inducements  to  pros- 
pect with  whom  your  competitors  have  unusual  influence 

Most  important  of  all  you  will  not-if  you  focus  your  mail- 
ings according  to  my  plan-^ffer  diamonds  to  both  the  bank 
president  and  his  gardener.  You  wiU  avoid  attempting  to  seU 
the  attorneys  and  the  doctors  dollar  watches  and  plated  spoons, 

w!!^  y  V*"?'P^?^'  ^°  y^"''  '^^P  ^  **^«  ^heap  lines  of 
jewelry  stocks.     In  other  words,  you  can  make  your  special 

offers  to  those  who  appreciate  them  most— your  high-priced 
goods  will  be  described  to  the  high-priced  people,  yoiu-  medium- 
priced  stocks  to  those  m  moderate  circumstances,  and  your 
cheap  lines  to  those  unable  to  afford  better.  By  the  way  I 
have  found  it  wiser  to  over-estimate  the  prospect's  purchasiiig 
abihty  than  to  under-estimate  it.  It  is  best,  I  thi^k,  not  to 
draw  the  distmctive  hue  too  close. 

How  do  I  collect  these  lists  for  my  direct  advertising.?  It  is 
cheapest  to  stock  up  at  first  by  securing  a  list  of  the  taxpayers 
from  the  tax  records.  Then,  when  people  come  into  the  store 
who  are  not  on  this  list,  they  can  be  added.  For  instance, 
suppose  a  woman  comes  in  to  look  at  knives  and  forks.  She 
decides  that  she  will  "drop  in  again." 

I  always  secure  her  name  and  address  at  this  stage  in  the 
conversation  and  make  a  note  that  she  is  looking  at  "k  and  f  " 

StarHno    1       '^  ^  7^'}^,}'^''  a  letter  and  call  attention  to  my 
iitw^ng    lower-pnced    lines,  if  I  believe  she   was  shown  too 
Mailing    expensive  stocks.     If  she  fails  to  come  in  again  I 
List       mark  the  card  carrj^ing  her  name  and  address  with 
a  signal  to  indicate  that  she  is  buying  of  competitors. 
At  reasonable  intervals  she  and  the  others  in  the  same  "cus- 
tomer class,     as  I  call  the  divisions  of  my  direct  advertising 


PROGRESS  IN  RETAIL  ADVERTISING 


49 


list,  will  receive  special  offers  that  I  believe  should  interest  them 
in  my  store. 

Once  the  list  is  started,  it  grows  almost  automatically  if  every 
sale  is  recorded  on  a  sales  sHp  that  calls  for  the  purchaser's 
name  and  address.  An  extra  carbon  copy  can  be  secured  with- 
out added  effort,  if  your  accounting  system  makes  it  useful. 
I  have  a  slip  made  out  for  each  purchase.  So  that  customers 
will  not  think  we  are  cross  examining  them  unreasonably  when 
they  make  cash  purchases,  we  give  away  many  little  gifts  at 
regular  intervals  to  names  drawn  from  our  lists. 

If  a  customer  hesitates  about  giving  his  name  and  address, 
we  explain  about  these  drawings  from  the  list.  After  the 
presents  are  awarded  notices  go  to  the  lucky  customers.  Fully 
two  thirds  of  them  call  for  the  presents.  It  is  not  necessary, 
naturally,  to  write  out  detailed  information  every  time  a  steady 
customer  buys,  but  it  would  not  take  much  time  to  do  so,  at 
that.  I  also  secure  the  names  and  addresses  of  all  those  who 
use  only  the  repair  department,  to  add  to  my  general  list.  The 
detailed  classifications  concerned  with  age,  credit,  standing, 
patterns  of  stock  preferred,  and  the  like  are  usually  added  when 
cards  are  niade  out  from  the  sales  slips  for  new  customers. 

When  using  my  direct  mailing  list  I  have  in  mind  a  number  of 
pithy  facts  about  the  purchasing  power,  as  the  economists  would 
style  it,  that  lies  right  here  under  my  nose,  so  to  speak.  Some 
day  I  am  going  to  write  them  out  on  a  card  for  my  salesmen, 
and  when  I  do,  these  will  be  among  the  firsts 

Every  newly  married  couple  surely  need  from  the  stores  something  in  addi- 
tion to  their  normal  demand. 

Every  young  man  with  a  "best  girl"  is  mterested  in  certain  lines,  which  in 
Jewelry  include  a  diamond,  and  probably  a  plain  gold  ring. 

Every  piece  of  patterned  stock  is  a  foundation  for  more  sales  in  the  same 
pattern. 

Every  owner  of  certain  types  of  valuable  possessions  should  have  them  re- 
paired at  regular  intervals. 

Every  automobile  owner  has  special  wants. 

Every  baby  offers  a  chance  for  varied  sales,  especially  if  its  birthday  is 
recorded. 

Every  boy  needs  "grown-up  equipment"  of  various  kinds  at  a  certain  age. 
and  his  father  should  be  reminded. 

Next  I  want  to  show  how  I  handle  these  direct  mailing  lists. 
I  use  a  3  X  5  card,  although  5x8  size  might  be  more  service- 
able.    It  is  cheapest  in  the  long  run  to  use  good  cards.    Along 


m  PROGRESS  IN  RETAIL  ADVERTISING 

the  top  of  the  card  runs  a  line  reading:  "1,  lA,  IB,  2,  2A,  2B. 
»,  3A,  4,  5,  6,  7.  These  signals,  which  are  checked  to  fit  each 
case,  have  the  following  meanings: 

1.  Customer  who  uses  high-grade  goods. 

lA.  Customer  who  uses  medium-grade  goods. 
IB.  Customer  who  uses  cheap  goods. 

2.  Customer  who  uses  high-grade  goods  but  divides  his  business. 

2A.  Customer  who  uses  medium-grade  goods  but  divides  his  business. 
2B.  Customer  who  uses  cheap  goods  but  divides  his  business. 

3.  Customer  of  competitors  who  uses  high-grade  goods. 
SA^ustomer  of  competitors  who  uses  medium-grade  goods 

4.  Prospect  who  sends  off  for  goods. 

5.  Prospect  I  know  will  want  something  from  my  stocks. 
0.  Prospect  hving  out  of  the  city. 

7.  I  leave  this  number  blank  for  special  occasions. 

Over  the  check  mark  in  this  line  of  signals  on  each  card  I 
place  a  small  metal  tab  such  as  any  business  equipment  shop 
carries.  I  buy  tags  of  a  certain  color  for  each  of  the  divisions 
so  that  It  IS  easy  to  sort  my  cards  at  a  glance.  On  the  right' 
hand  side  of  the  cards  I  have  these  signals:  **A,  B,  C  D  " 
They  have  to  do  with  credit  standings  and  mean : 


PROGRESS  IN  RETAIL  ADVERTISING 


51 


A.  Good. 

B.  Good,  but  slow. 

C.  Not  good.    Unworthy  of  credit. 
No  ci-edit  information  available. 


D 


The  remainder  of  the  card  is  not  different  from  others  in  use 
« 1?^^L^V^  country.     There  are  these  self  explanatory  headings : 

Mr.,  1 .  O.,  No.,  St.,  or  R.  F.  D.  No.,  goods  wanted,  advertising 
sent,  date,  results,  remarks." 

Under  'Remarks"  I  record  the  approximate  age  of  each 
customer  and  prospect,  so  that  I  do  not  spend  money  telling 
young  folks  about  goods  only  elderly  people  can  use.  Re- 
cently I  decided  to  send  some  direct  advertising  about  "far 
and  distant  spectacles  to  elderly  people  and  found  I  had  over 
live  hundred  suitable  names.  Under  this  heading  I  also  classify 
the  names  according  to  the  special  lines  of  my  stocks  in  which 
they  are  particularly  interested. 

These  lists  can  be  easily  handled  by  a  girl— at  low  pay— who 
need  give  only  a  small  portion  of  the  day  to  them.  If  your 
business  is  not  large  enough  to  warrant  hiring  a  girl  for  general 
oflice  work,  half  an  hour  of  your  time,  or  a  salesman's,  will  do 


the  trick.  But  unless  it  is  absolutely  necessary,  do  not  give 
your  time  to  handling  the  routine  of  your  mailing  lists.  Al- 
though it  does  take  a  bit  of  time,  a  mailing  list  classified  so  as 
to  focus  your  advertising  will  more  than  pay  for  itself.  At 
any  rate  mine  does.  The  savings  which  it  puts  into  my  profit 
and  loss  account  by  bringing  cash  returns  from  advertising 
expenditures  I  formerly  expected  to  pull  nothing,  helps  me  to 
make  money  in  spite  of  the  tide  of  rising  costs. 

So  much  for  the  first  of  my  five  plans.  The  second  deals 
with  special  advertising  plans.  In  place  of  many  of  my  dis- 
carded "announcements"  I  use  advertisements  about 

Special     unusual  advertising  campaigns  or  stunts.     I  have  two 

Plans^^  or  three  that  go  particularly  well,  but  there  is  little 
need  for  my  describing  all  of  them,  for  if  I  show  the 
advantage  of  hitching  advertisements  with  unusual  sales,  others 
will  probably  be  able  to  think  up  plans  better  than  mine. 

However,  I  want  to  describe  a  typical  sale.  I  have  used  it 
twice,  and  it  went  better  the  second  time  than  the  first.  In  a 
neighboring  town,  owing  to  a  misunderstanding,  it  started  a  towTi 
row  which,  of  course,  had  only  one  effect  on  my  business — to 
help  it  along.  When  this  plan  is  working,  Ricker  &  Son  are 
usually  the  topic  of  conversation  wherever  two  people  living  in 
our  selling  radius  meet. 

I  take  ten  prizes  from  stock:  five  watches  that  sell  at  a  dol- 
lar, three  dollar-and-a-half  watches,  one  man's  watch  fitted  in 
a  silverine  case,  and  one  woman's  filled  watch.  These  I  number 
from  one  to  ten  and  show  in  the  windows.  To  ten  people 
known  only  by  me  as  "volunteers"  in  my  plan,  I  give  tickets 
numbered  from  one  to  ten  with  instructions  to  hand  them  to  the 
first  person  inquiring:  "Do  you  trade  with  Ricker  &  Son, 
the  jewelers?"  I  tell  about  the  sale  in  my  advertisements — 
no  longer  "announcements"  when  they  have  news  such  as  this  to 
spread — and  during  the  first  few  days  hire  a  man  to  go  about  firing 
the  question  at  every  one  he  meets.  Of  course,  those  who  get  the 
tickets  receive  the  watches  with  the  corresponding  numbers. 

Usually  I  hand  several  of  the  ten  tickets  to  men  out  among 
the  public  a  great  deal,  and,  curiously  enough,  these  are 
almost  always  the  last  to  be  located.  In  most  instances  the 
lucky  numbers  are  searched  out  in  odd  ways — at  entertain- 
ments, school  affairs,  and  the  like — ^which  causes  comment  that 
is  the  best  kind  of  advertising.  After  the  excitement  is  over 
people  tell  how  near  they  came  to  getting  a  prize  or  that  they 


t 


52 


PROGRESS  IN  RETAIL  ADVERTISING 


PROGRESS  IN  RETAIL  ADVERTISING 


53 


had  intended  to  ask  this  one  and  that  one.  This  sort  of  plan 
does  not  cost  much  and  it  puts  life  into  portions  of  my  advertis- 
ing costs  which  I  had  considered  almost,  if  not  absolutely,  dead 
items.  If  I  get  but  half  of  1  per  cent,  increased  effectiveness 
from  my  advertising  bills  as  a  result,  it  is  just  half  of  1  per  cent, 
that  I  can  count  on  to  check  rising  costs. 

My  third  method  of  keeping  up  with  rising  costs  by  securing 

more  sales  at  my  old  expense  rate  is  to  connect  my  advertising 

with  local  events.     This  is  worth  while  for  the  same 

Adv^i^ng  J^^sons  that  make  my  methods  one  and  two  helpful 

Timdy  — ^^  concentrates  my  advertising  and  takes  it  out 
of  the  announcement  class.  For  instance,  when  the 
state  normal  school  had  a  May-pole  celebration,  one  of  my 
windows  contained  a  miniature  pole  surrounded  by  dolls. 
During  our  city  ball  league's  season  I  usually  show  a  little  base- 
ball field,  with  tiny  players  properly  named.  Under  this 
method  belongs  my  belief  that  it  is  advantageous  to  connect  up 
with  the  manufacturer's  national  advertising. 

At  one  time  I  tried  to  buck  the  1847  silver  national  advertis- 
ing. I  spent  a  lot  of  money  and  in  the  end  lost  out.  Now  I 
attempt  to  use  the  1847  advertising  and  push  my  own  line  indi- 
rectly when  the  opportunity  offers.  As  a  result,  I  am  selling 
more  of  both  the  1847  line  and  my  own.  I  also  find  it  wise 
to  use  freely  the  various  advertising  services  offered  to  retailers 
by  the  manufacturers.     .     .     , 

Another  article  in  the  same  series  tells  how  Charles  E.  Spil- 
lard,  a  clothing  dealer  in  an  Illinois  town,  utihzed  advertising 
to  develop  what  he  calls  "store  personahty."  A. portion  of  the 
article  follows: 

*First  of  all,  I  decided  that  the  customers  must  unconsciously 
feel  that  the  clerks  had  their  satisfaction  at  heart  absolutely 
as  keenly  as  I,  the  owner.     Then  they  would  not 
Per^^v  ^^i^^  *^  buying  from  the  boys  when  Spillard  was 
^or  the     ^^^   ^^  hand.      It    was    as    plain    as  the    nose   on 
Store      your  face  that  the  clerks  would  not  make  an  impres- 
sion of  this  sort — of  the  strongest  kind — ^unless  I 
made  them,  too,  owners. 
So  I  called  the  boys  together  and  gave  them  a  working  interest 

^Syitem,  February,  1913,  p.  141. 


i 


in  the  business.  It  was  the  most  satisfactory  deal  I  ever 
closed. 

The  advertising,  for  example,  played  its  part.  I  wrote  ad- 
vertisements that  emphasized  the  store  policies  we  ratified  at 
the  meeting  which  ended  in  the  boys  getting  a  share  of  the 
business.  I  mentioned  the  boys  in  these  advertisements. 
This  publicity  made  good. 

Here  is  a  sample  of  it : 

MT   BUSINESS  BIRTHDAT 

To-day  is  my  business  birthday.  As  a  business  man,  I  am  fifteen  years 
old  to-day.  I  can't  let  the  occasion  pass  without  a  word  or  two  addressed  par- 
ticularly to  the  young  men  associated  with  me  in  the  store  (who  have  a  profit- 
sharing  interest)  and  to  the  good  staunch  friends  and  loyal  customers  by  whose 
aid  1  have  been  able  to  climb  a  little  way  up  the  ladder  of  success. 

Our  motto  has  always  been:  "To  the  other  man's  business  we  give  our 
respects;  to  our  own  we  give  our  attention,  our  ability,  and  our  all." 

Ours  will  always  be  a  progressive  and  aggressive  policy.  For  your  business 
we  will  fight  with  fair  methods  and  first-class  merchandise,  not  over-priced, 
but  never,  never  with  slander. 

I  find  it  hard  to  express  in  a  few  words  my  deep  sense  of  obligation  for  and 
my  sincere  appreciation  of  your  help  and  patronage.  This  means  all  of  you — 
the  man  who  buys  a  fifty-cent  working  shirt,  as  well  as  the  man  who  buys  a 
silk-lined  overcoat. 

Another — one  that  drew  attention  to  the  way  the  boys  and 
I  buy: 

OUB  WAT — ^IS  IT  TOUBS? 

We've  told  you  from  time  to  time  about  our  method  of  selling  goods:  Nothing 
misrepresented,  the  same  price  to  all,  trade  back  for  your  money  Imck,  and  so  on. 

We  follow  what  we  believe  to  be  the  best  way — ^the  fair  way.  We've  often 
said,  "If  you  can  tell  us  a  fairer  way,  we'll  follow  it,"  and  we  will. 

Now,  we  want  to  tell  you  about  the  way  we  buy.  The  boys  here  in  the 
store  and  I  try  our  best  to  do  what  is  right,  not  only  in  the  selling,  but  also  in 
the  buying.  We  think  we  sell  the  best  of  everything  for  the  price.  If  it's  a 
shirt  for  a  dollar,  ours  is  the  best  for  that  price.  If  it's  a  suit  or  coat  for 
twelve-fifty  to  thirty  dollars,  ours  is  the  best  for  the  price.  And  it's  just  so 
with  everything  in  the  store. 

This  is  the  way  we  figure  it.  We  don't  take  any  one  man's  judgment  in 
any  of  the  buying.  Every  one  of  us  in  the  store  helps  to  buy.  \Vhen  a  shirt 
manufacturer  tells  us  he  can  offer  us  a  better  shirt  to  sell  for  a  dollar,  we  com- 
pare it  with  the  kind  we  carry.  We  examine  it  from  tail  to  collar  band.  We 
first  examine  the  quality,  next  the  make,  then  the  style,  and  then  the  fit.  We 
never  ask  a  customer  to  buy  them  until  we  have  tested  'em  and  tested  'em 
thoroughly.     That's  the  way  we  do  it  with  all  the  goods  we  buy. 

When  you  buy,  why  don't  you  try  this  buying  method  of  ours?  If  you  do 
we  will  get  the  lion's  share  of  your  trade. 


I 


i 


54  PROGRESS  IN  RETAIL  ADVERTISING 

One  more — purely  about  store  policies: 

THEY  CAN,   IF  THEY   WILL — BUT  THEY  WON't 

"Why  is  your  store  a  better  place  to  buy  a  shirt,  or  anything  in  the  clothing 
line,  than  any  other  store?" 

"Can't  other  dealers  use  the  same  methcxis  in  buying  and  selling  as  you  use?" 

These  are  two  questions  I  confronted  the  other  day.     Here's  my  answer. 

"They  can  if  they  will — but  they  won't." 

When  the  boys  or  I  sell  you  a  suit,  we  all  strictly  enforce  this  rule — we  fit 
you  or  we  won't  sell  you.  We  don't  sell  you  a  suit,  the  coat  of  which  you  find 
a  little  too  low  or  a  little  too  high  in  the  neck  when  you  get  home.  You  will 
not  find  the  trousers  too  long  or  too  short,  and  you  will  not  find  any  other 
defect,  either.  Nothing  of  that  sort  to  our  suits.  They  must  be  right  before 
they  go  out. 

Another  rule:    Wool  must  be  wool,  not  part  cotton. 

Another  rule:  The  price  is  the  same  to  everybody,  and  the  lowest  that 
good,  honest  goods  can  be  sold  for. 

A  third  rule:  If  by  mistake  anythmg  should  go  wrong,  or  an  error  be  made, 
I  stand  ready  and  willing  to  make  good.  And  you  won't  be  made  to  feel 
uncomfortable  when  you  bring  the  goods  back,  either. 

Will  you  take  time  some  day  to  visit  my  store.'  Then  you  can  judge  if  it 
is,  or  if  it  is  not,  the  best  place  to  buy. 

Will  you  take  time  to  see  if  my  suits  for  $15,  for  $18,  for  $20,  and  the  higher 
prices,  are  not  the  best — and  much  the  best — around  this  section  for  the  price.^ 

Will  you  take  the  time  to  look.'    Will  you.' 

In  the  succeeding  issue  Mr.  Spillard  outlines  somewhat  more 
fully  some  of  the  main  features  of  the  advertising  policy. 

♦  ...  I  think  most  of  us  will  agree  that  it  is  very  diflfi- 
cult  to  decide  what  it  is  right  to  spend  for  advertising.  Fur- 
thermore, after  we  have  reached  a  conclusion  and  paid  out  our 
money,  it  is  often  even  more  difficult  to  trace  definite  results. 
Under  these  conditions  we  are  sooner  or  later  tempted  to  treat 
advertising  as  a  bad  habit,  write  our  copy  or  dress  our  windows 
in  a  lackadaisical  way,  and  let  it  go  at  that. 

Please  do  not  think  I  am  putting  a  pedestal  under  Charles 
E.  Spillard  when  I  say  that  I  have  gotten  enough  out  of  my 
advertising  to  warrant  looking  at  it  in  a  different  way.  Many 
a  time  I  have  worked  for  hours  over  an  advertisement  and  paid 
out  good  money  to  have  it  printed — without  obtaining  any 
sales  that  I  could  trace.  But  by  fighting  it  out  over  and  over 
again,  I  now  consider  advertising  one  of  the  keenest  weapons 
with  which  to  master  rising  costs. 

*System,  Marth,  1915,  p.  267. 


PROGRESS  IN  RETAIL  ADVERTISING 


55 


Making 
the 
Adverfmng 
Pay 


It  is  a  bit  diflScult  to  put  into  words  exactly  how  I  make  my 
advertising  pay.  Still  I  think  I  can  do  so  in  at  least  a  rough 
and  ready  way.  For  one  thing,  I  always  have  a  defi- 
nite object  in  mind  when  I  start  to  write  an  adver- 
tisement. I  find  that  doing  so  gives  a  "slant"  to  the 
advertisement.  Ideas  and  statements  which  have 
nothing  to  do  with  the  object  of  the  advertisement  are 
kept  in  the  background.  The  result  is  that  the  reader  carries 
away  the  thought  you  really  want  to  impress  upon  him,  and 
not  a  jumble  of  more  or  less  vague  impressions. 

Here  is  a  concrete  example  of  what  I  mean — an  advertise- 
ment intended  to  drive  home  the  fact  that  mistakes  are  bound 
to  occur  every  now  and  then,  even  in  the  best  regulated  of 
stores : 

ONLY  ONCE  IN  A  THOUSAND  TIMES 


A  customer  came  in  the  other  day- 
follows: 


-returned  a  shirt.    The  conversation 


"How  much  did  you  pay  for  the  shirt.'"     (Shirt  still  wrapped  up.) 

**I  paid  a  dollar  for  it." 

"Here's  your  dollar.     How  long  have  you  traded  with  me?" 

*'On  an  average,  I  buy  something  of  you  twice  a  week." 

"Let's  figure.  Twice  a  week  means  about  one  hundred  times  a  year.  A 
hundred  times  a  year  means  that  in  ten  years  you  have  made  about  one  thousand 
purchases  in  my  store — ^and  only  once  in  these  thousand  transactions  has  a 
mistake  been  made.  How  many  are  there — in  business  for  themselves  or 
employed — with  whom  something  doesn't  go  wrong  once  in  a  thousand  times? 
I  can  say— and  say  it  honestly— that  my  percentage  of  mistakes  here  in  the 
store  is  even  less  than  that.  Still  I  stand  ready  to  make  each  of  these  once- 
in-a-thousand-times  mistakes  right.  And  if  the  time  should  ever  come  when 
that  percentage  increases,  I  shall  make  all  the  additional  mistakes  right.  Can 
any  one  do  more?  " 

Next  in  importance  to  loading  advertising  with  solid  shot, 
instead  of  buckshot,  and  then  aiming  at  a  bull's-eye,  comes,  I 
think,  obtaining  the  right  ring.  By  this  I  mean  that  the  copy 
needs  to  ring  true  to  the  average  reader  and  thereby  carry  over 
to  him  an  impression — unconscious,  possibly — that  what  you 
say  is  based  on  fact. 

Of  course  we  all  believe  what  we  say  in  our  advertisements 
—we  know  the  goods  and  we  are  confident  of  their  value. 
Certainly  if  we  did  not  believe  what  we  say  we  would  not  have 
lasted  long  in  business.  But  it  is  difficult  to  color  printed 
words  with  this  behef  to  such  an  extent  that  the  reader  will 


50 


PROGRESS  IN  RETAIL  ADVERTISING 


PROGRESS  IN  RETAIL  ADVERTISING 


57 


become  so  firmly  convinced  he  will  not  doubt  for  a  moment  what 
they  say. 

I  find  that  the  best  way  to  make  advertisements  ring  true 
is  to  word  them  just  as  if  I  had  the  reader  in  front  of  me  in  the 
store.  I  try  to  talk  through  the  newspapers  exactly  as  I  talk 
across  the  counter.  I  forget  fancy  words  and  strike  out  straight 
from  the  shoulder.  Most  of  the  time  I  do  not  use  illustrations 
but  rely  on  big,  clear  type;  a  snappy  heading  that  will  arouse 
curiosity;  and  plenty  of  white  space,  to  get  a  reading  for  my 
advertisement.  The  following  advertisement  is  of  this  type, 
which  I  hope  hits  straight  from  the  shoulder  and  has  no  fancy 
words  or  other  frills : 

THIS  REALLY  HAPPENED  AT  SPILLARd's 

"Hello,  Spillard.  I  have  often  read  your  advertising  telling  about  the  good 
clothes,  hats,  shirts,  and  so  forth,  that  you  sell.  I  also  have  heard  a  good 
many  speak  highly  of  them  and  say  that  your  prices  are  never  higher — and 
often  less — than  those  asked  elsewhere.  I  don't  know  why,  but  I  was  undsr 
the  impression  that  you  were  high  priced.  I  have  started  for  your  store  several 
times,  but  in  some  way  I  was  sidetracked  or  something  interfered.  But  last 
season  I  came  to  you  and  bought  a  suit  for  twenty  dollars — that's  the  price 
I  usually  pay  for  a  suit — ^and  all  I  can  say  is  tliat  many,  many  times  I  have 
wished  that  I  had  gone  to  you  before." 

I  thanked  him  for  telling  me  of  this  experience,  and  said:  "Just  tell  your 
friends  not  to  make  the  same  mistake — tell  them  to  come  in  and  look — that's 
all.    Will  you.'" 

Suits  and  overcoats  are  priced  step  by  step  from  $12.50  to  $35. 

In  this  advertisement  I  came  right  out  and  talked  about  the 
ring  of  the  copy: 

THE  BIGHT  KIND  OF  A  RING 

Don't  think  me  egotistical  or  conceited  just  because  I  sound  such  loud  praises 
about  the  clothes,  the  hats,  the  shirts,  and  so  forth,  that  I  sell.  I  am  enthusi- 
a.stic  about  them.  I  just  can't  help  it.  I'm  enthusiastic  about  them  because 
I  know  every  word  I  say  about  them  is  true. 

You  know,  just  as  well  as  I,  that  when  a  person  says  a  thing  that  he  really 
believes,  it's  got  the  right  kind  of  a  ring  to  it.  Isn't  it  so?  When  I  say  I 
sell  the  best  clothes,  the  best  hats,  the  best  shirts,  and  the  best  rest  of  my 
line,  that  can  be  had  around  here  for  the  price,  I  believe  I  am  speaking  the 
gospel  truth. 

I  sell  the  best  that  are  made  for  several  very  good  reasons.  While  the 
profit  is  not  quite  so  large  on  each  individual  sale  as  on  lower  grade  goods, 
customers  come  back  again  to  trade.  And,  besides,  these  best  goods  are 
easier  for  me  to  sell  and  easier  for  you  to  buy.  There's  more  than  one  way  to 
prove  what  I  say  is  true,  but  the  best  way  is  to  come  to  my  store,  and  if 
you're  wearing  a  suit  you  paid  $15  for,  or  one  you  paid  $18  for,  or  $20,  or  a 


higher  priced  one,  to  compare  it  with  mine  at  the  same  price.    Then  it's  up  to 
you. 
Will  you  compare."    Will  you? 

Before  concentrating  copy  on  a  definite  object  and  making 
it  ring  true  can  do  much  good,  we  must  of  course  get  the  right 
kind  of  stock  and  offer  it  at  fair  prices.  That  goes  without 
saying.  I  am  assuming  that  fair  values  stand  back  of  the  ad- 
vertising. Still  I  do  not  believe  in  being  at  all  backward  about 
telling  the  customers  that  we  have  the  right  sort  of  stocks. 

This  advertisement,  for  instance,  helped  me  to  convince  people 
•that  my  goods  are  right: 


PUTS  IT  RIGHT  UP  TO  YOU 


Then 


Ask  yourself  a  question  or  two  and  answer  them  fairly  and  squarely, 
figure  if  you  are  getting  what's  coming  to  you  in  the  line  of  clothes. 

Do  your  clothes  look  and  fit  as  good  as  some  of  your  friends'  or  neighbors*, 
who  pay  the  same  price?    Do  they  fit  as  if  they  belonged  to  some  one  else? 

If  you're  of  a  slender  build,  do  your  clothes  make  you  look  more  slender, 
or  if  you  are  a  stout  man,  do  your  clothes  make  you  look  bigger  than  ever? 
If  either  of  these  possibilities  is  a  fact,  there  is  something  wrong  with  the 
clothes. 

If  you  get  the  right  make  of  clothes  you  can  overcome  a  good  many  diffi- 
culties that  loom  pretty  big.    Our  time  against  yours.     Will  you  look?    .     .    • 


one  that  stands  up  for  my  goods  and  has 
attention   value   for  reaching  the  skilled  men  with 


Just  one  more 
unusual 

whom  I  like  to  trade  because  it  mentions  our  largest  local  in- 
dustry, watch-making: 

WHAT  DEVELOPED  FROM  A  COLLAR  SALE 

The  Time — (One  year  ago). 

The  Place — (Spillard's  clothing  store). 

Customer  (a  watch  factory  man) — "I  bought  two  of  those  'Slidewell'  collars 
of  you  and  never  was  so  well  pleased  in  my  life.  Since  then  I  have  always 
worn  them." 

Salesman — "Did  you  ever  buy  anything  else  of  us  besides  collars?" 

Customer — "  No,  I  guess  not." 

Salesman — "What  kind  of  sox  do  you  generally  buy?" 

Customer — "  Almost  always  I  buy  black,  two  pair  for  a  quarter." 

Salesman — "I  wish  you'd  start  in  sox  buying  from  us  just  as  you  did  collar 
buying.  If  you've  been  buying  twelve-and-a-half-cent  sox,  or  twenty-five-cent 
ones,  or  fifty-cent  ones,  try  out  ours  at  the  same  price.  Wear  'em  hard,  com- 
pare 'em  with  the  kind  you've  been  buying,  and  you'll  say  just  as  good  things 
about  them  as  you  did  just  now  about  the  collars." 

What  Happened — He  bought  two  pairs  of  two-for-a-quarter  sox.  A  Uttle 
later  on  he  bought  a  suit.    Now  he  not  only  buys  here  everything  he  needs 


I 


f 


58 


PROGRESS  IN  RETAIL  ADVERTISING 


in  our  line,  but  is  continually  at  his  friends  who  trade  elsewhere  to  try  our 
collars  and  sox.     He  figures  that  if  they  try  our  collars  and  sox  once,  sooner 
or  later  they'll  buy  everything  here,  just  as  he  does. 
Will  you  try  our  collars  and  sox  next  time? 

So  much  for  advertising  in  the  newspapers.  The  advertising 
bills  do  not  stop  when  the  newspapers  are  paid,  however. 
The  show  windows  are  expensive — sometimes  I  am  afraid  we 
feel  like  calling  them  expensive  and  stopping  at  that. 

Indeed,  at  one  of  the  store  meetings  which  take  place  regu- 
larly with  us,  this  very  question  came  up — "What  do  we 
get  out  of  the  windows  in  dollars  and  cents?"  So  for  a  time- 
we  carefully  watched  the  people  who  went  by  the  store;  we 
counted  them  and  recorded  how  many  stopped  to  look  at  the 
displays. 

After  we  had  thought  over  the  figures  that  resulted  we  tried 
an  experiment.  We  had  some  neat  show-window  cards  made 
— 16  by  20  inches — and  quiet  frames  for  them.  These  cards 
told  in  a  few  words  what  the  windows  were  intended  to  dis- 
play and  mentioned  prices.  There  was  nothing  outlandish 
about  them,  but  they  were  striking  enough  to  catch  the  eye. 

Again  we  watched  the  passing  people.  More  of  them  stopped. 
The  cards  gave  the  windows  a  chance  to  say  something — our 
displays  were  no  longer  displays  and  no  more;  they  were  dis- 
plays that  told  what  they  displayed  and  why  they  displayed 
it. 

We  even  traced  direct  sales  to  the  windows,  once  they  were 
given  a  chance  to  tell  what  their  offerings  cost  and  why  they 
were  worth  buying.  Now  we  make  it  a  practice  to  keep  cards 
in  the  windows,  for  we  believe  they  have  a  share  in  the  fight 
against  rising  costs.     .     .     . 

The  experiences  thus  recounted  indicate  the  degree  of  atten- 
tion which  is  now  being  given  by  retail  stores  to  scientific 
methods   of  operation.    And  among   the  problems 
Should  the  which  they  are  constantly  encountering  is  the  question 
Retailer     of  how  much  of  their  total  cost  of  business  they  ought 
Advertidng  ^^  spend  on  advertising.     I.  R.  Parsons,  Advertising 
Manager  of  Carson,  Pirie,  Scott  &  Co.,  of  Chicago, 
in  an  address  before  the  Chicago  Convention  of  the  Associated 
Advertising  Clubs  of  the  World,  discussed  this  question  spe- 


PROGRESS  IN  RETAIL  ADVERTISING  59 

cifically.  While  Mr.  Parsons  represents  the  department-store 
type  of  problem  in  his  main  positions,  there  are  many  points 
in  his  paper  which  "regular"  retailers  can  use  to  advantage. 
He  said: 

*How  much  should  a  retail  store  spend  for  advertising.'  An- 
swering that  question  reminds  me  of  the  fix  into  which  an  indul- 
gent fiance  got  himself  one  day.  It  seems  each  week  they  dined 
at  a  well-known  restaurant,  he  and  his  sweetheart.  Being  most 
solicitous  of  her  pleasure,  he  would  insist  that  she  order  what- 
ever her  whim  might  dictate.  Gradually  she  ran  out  of  gastro- 
nomical  ideas  and  one  evening  she  said,  "Now,  Jack,  I  don't 
see  why  you  make  me  order  all  the  time.  To-night  you  please 
say  what  you  want  this  time.  Now  do;  you  say  what  you  want 
and  then  Til  say  what  I  want — and  then  we  can  argue." 

So,  to  say  what  a  retail  store  should  spend  for  advertising 
puts  me  in  the  same  boat  with  this  fiance.  After  all,  I  am 
afraid  it's  simply  a  case  of  "  then  we  can  argue." 

Naturally,  I  have  some  very  definite  ideas  regarding  how 
much  a  retail  store  should  spend  for  advertising,  just  as  I  have 
regarding  how  that  amount  should  be  spent.  But  so  many 
varying  conditions  surround  the  matter,  and  there  are  so  many 
different  conditions  constantly  arising  in  the  daily  conduct  of  a 
retail  business,  that  to  put  any  figure  down  in  dollars  and  cents 
or  in  percentage  is  a  most  difficult  matter  indeed — and  at  best 
it  will  remain  open  to  argument. 

However,  we  all  do  know  that  there  must  be  some  limit  to  the 
amount  a  retail  store  should  spend  for  advertising  and  there 
must  be  a  figure  below  which  a  store  cannot  safely  go  in  trying 
to  save  in  the  matter  of  its  advertising.  But  putting  down  any 
figure  as  an  arbitrary  limit  either  way,  without  very  definitely 
outlining  the  conditions  which  must  surround  that  retail  busi- 
ness to  make  this  figure  practical,  would  be  like  taking  a  man 
blindfolded  to  a  certain  spot  of  your  own  selection.  He  may 
have  to  admit  he's  there,  but  he  doesn't  for  the  life  of  him  know 
where  it  is  or  how  he  got  there. 

I  know  of  stores  that  are  purported  to  spend  but  1|  per  cent, 
of  their  entire  gross  receipts  for  advertising,  their  advertising 
charges  including  many  items  of  more  or  less  general  expense, 
like  window  decorating  and  other  general  promotion  costs, 

*Printers'  Ink,  June  24,  1915.  p.  97. 


60 


PROGRESS  IN  RETAIL  ADVERTISING 


I 

i 


and  each  of  the  stores  in  question  does  a  tremendous  business. 
I  know  of  several  other  stores  whose  yearly  advertising  cost 
amounts  to  4  per  cent,  of  then*  gross  sales  or  thereabouts  and 
they  seem  to  get  away  with  it.  But  I  do  not  know  of  any  retail 
store  of  any  consequence  which  spends  less  than  Ij  per  cent, 
for  advertising,  nor  did  I  ever  hear  of  any  store  lasting  very 
long  with  an  advertising  burden  of  more  than  4  per  cent. 

Somewhere  between  these  two  extremes  must  be  that  state  of 

sublime  business  existence  where,  as  mother  used  to  read  to  us 

out  of  "Little  Goldie-Locks,"  the  soup  is  "just  right, 

Atmwe  ^^^^  neither  too  hot  nor  too  cold."  In  fact,  be- 
Advertuing  ^^^^  these  two  extremes  lies  the  advertising  expen- 
ImestmerU  diture  upon  which  a  retail  business  can  build  and 
prosper,  upon  which  it  can  justify  every  dollar  it 
spends  for  advertising  as  the  proper  cost  of  just  another  branch 
of  the  actual  service  rendered  to  its  public. 

In  fact,  if  a  store  does  not  advertise  enough  to  make  the  daily 
happenings  of  its  business  known  or  to  keep  the  public  informed 
of  the  advantages  of  every  kind  which  it  offers,  whether  they  be 
of  monetary  or  simply  educational  consideration,  that  store  is 
just  as  much  lacking  in  its  plain  duty  to  the  public,  which  it 
has  been  favored  by  the  Fates  to  serve,  as  is  the  store  which 
resorts  to  methods  of  over-exploitation.  These  methods,  by 
the  way,  may  be  as  seemingly  innocent  as  the  attempt  to  create 
for  a  sale  a  false  impression  of  extraordinary  value  or  import- 
ance by  the  use  of  a  tremendous  amount  of  space  and  big  black 
type,  even  without  any  extravagant  statements  contained  in 
the  wording  of  the  advertisement  itself  or  without  being  as 
luciferous  as  any  deliberate  falsehood  might  possibly  be.  For, 
in  the  one  case,  the  public  remains  wn-informed  about  the  store 
and  in  the  other  case  the  public  is  miVinformed  about  the 
store. 

So  a  retail  store,  to  be  worthy  of  success,  must  advertise 
enough,  just  as  it  must  not  advertise  too  much. 

While,  of  course,  one  or  two  stores  in  the  Loop  of  Chicago 
spend  much  less  for  advertising  than  would  be  necessary  were 
they  not  so  ideally  situated,  out  of  my  experience  has  grown  the 
belief  that  a  basic  figure  amounting  to  between  2^  and  3  per 
cent,  on  the  gross  business  done  is  about  the  right  amount  the 
average  store  should  spend  for  advertising — that  is,  if  the  store 
in  question  is  situated  in  a  fairly  good  location  and  its  other 
physical  features  are  equally  favorable. 


PROGRESS  IN  RETAIL  ADVERTISING  61 

Such  a  store,  being  generaled  by  a  merchant  in  the  good  old 
Anglo-Saxon  meaning  of  the  term,  can  fulfil  its  serv- 
How  the    ice    to    the    public    without    spending    over    3    per 
HorTMight  ^^^t.     Such  a  store  generaled  by  the  man  and  mer- 
Be  Divided  chant,  or  the  composite  of  several  men,  as  I  will  pic- 
ture later,  may  have  an  index  of  its  advertising  per- 
centages covering  its  principal  departments  reading  something 
like  this: 

YARD  GOODS  AND  ACCESSORIES 

Advertisingr 
Department  Percentage 

Silka  and  Velvets 1^% 

Dress  Goods 2  % 

Wash  Goods 1|% 

Laces  and  Embroideries 1  % 

Ribbons 1  % 

Trimmings 1  % 

•Notions  and  Dressmaker's  Supplies 1  % 

DRESS  ACCESSORIES 

Veilings 1|% 

Handkerchiefs   l|% 

Women's  Neckwear 1  % 

Gloves 1J% 

Hosiery 2  % 

Knit  Underwear  (cotton) 2  % 

Knit  Underwear  (silk)   3  % 

Parasols  and  Umbrellas 2  % 

Jewelry 3  % 

Hair  Goods 4  % 

Leather  Goods 3  % 

♦Toilet  Articles 2  % 

HOUSEHOLD  LINES 

Furniture 5  % 

Linens 1*% 

Carpets  and  Rugs 3  % 

Blankets,  Bedding,  etc 3  % 

Lace  Curtains ' 3  % 

Art  Needlework l^% 

Silverware 3  % 

China  and  Glassware 3  % 

Trunks  and  Bags 4  % 

Housefumishings 4  % 

Books 3  % 

*Such  departments  are  often  used  for  promotion  purposes   in  which  case 
any  definite  advertising  percentage  would  l>e  hard  to  estimate. 


m  PROGRESS  IN  RETAIL  ADVERTISING 

BEADT-TO-WEAB  APPAEEL  FOR  WOMEN  AND  CHILDREN 

Department  14S\lS? 

Women's  and  Misses*  Suits 3  or 

Women's  Dresses 4  or 

Girls'  Apparel 3  ^ 

Women's  and  Misses'  Coats 3  ^ 

Shoes a  cF 

Waists '.'.'.'.'.'.'.'.'.'.'.'.'.'.'.'.'.'.'.'.'.'..'". 3  // 

Separate  Skirts 3  v/ 

Millinery  (in  season) q  ^ 

Petticoats '.'.'.'.'.'.'.'.'.'.'.'. gw 

Lingerie gf /f 

Negligees '.'.'.'.'.'..'.'. ^v/ 

Infants'  Wear ^^^ 

Corsets .'.'.'.'.'.'.*.".'.'.'.*."." 3  ^ 

Purs  (in  season) s  V 

BEADT-TO-WE.VR  APPAREL  FOR  MEN  AND  BOYS 

Men's  Clothing e  0/ 

Boys'  Clothing '..'.'.'.'.'.'.'.'.'.'.'.'.'.'.'. 1  cy 

Men's  Shoes 3  cy 

Men's  Furnishings »  0/ 

Men's  Hats .'''.'.'.  y-..^.^.  V^  ['.'.'.'.'.'.'.'.'.'.'. '.]'.'.'.'.  t$ 

Total  Average  Advertising  Cost oicf 

\Much  figure,  being  reduced  by  business  done  by  departments  not  advert 
tismg,  will  undoubtedly  come  within  the  2^%  Hmit. 

Now,  as  I  said  in  the  very  beginning,  to  place  any  figures  of 
this  kind  before  you  necessitates  surrounding  those  figures  by 
an  hypothetical  case,  and  so  I  wish  to  picture  to  you  the  kind 
of  man  and  merchant,  or,  taken  compositely,  the  kind  of  firm, 
which  must  direct  a  business  having  this  ideal  department 
hst  of  advertising  percentage. 

He  is  a  fair,  just,  good-natured,  cheerful  despot  over  a  store 

reasonably  well  located,  enjoying  a  good  reputation,  pursuing 

diligently  every  day  a  straightforw^ard,  honest,  and 

Bro^-     aggressive  policy  of  business-getting  and   business- 

gauge      Duildmg.     He  insists  that  the  store  hold  strictly  to 

Proprietor  the   truth   in   its   merchandise   and   its   advertising. 

He  believes  that  the  sin  of  omission  is  as  great  as  the 

sm  of  commission.    He  insists  that  advertising  space  shall  be 

used  to  inform  the  public  about  the  store,  not  cajole  or  tempt  or 

entice  the  pubHc  into  buying  something  it  doesn't  want. 


PROGRESS  IN  RETAIL  ADVERTISING 


68 


He  generals  a  store  that  considers  it  a  duty  and  therefore 
does  tell  the  public  the  truth  about  itself,  telling  that  public 
editorially  and  otherwise  in  its  advertising  of  its  business 
purpose  and  intent  and  to  what  extent  it  is  achieving  that 

purpose. 

His  store  goes  out  to  do  big  things  when  it  has  big  things  to 
do,  but  he  doesn't  believe  in  filling  page  after  page  of  newspaper 
space  unless  the  store  has  something  to  say  worth  all  the  space 
it  takes  to  say  it. 

He  doesn't  believe  in  using  any  very  large  fixed  space  every 
day  in  the  newspapers,  but  instead  feels  it  better  business  to 
use  the  space  each  event  justifies,  even  if  the  space  costs  a 
little  more  that  way,  than  to  run  the  risk  of  finding  the  store 
some  day  forced  to  fill  a  big  fixed  space  with  copy  whether  or 
not  the  sales  or  the  merchandise  or  the  season  or  the  weather 

justifies  it. 

The  store  which  this  great  man  generals  has  not  been  forced 
to  shout  at  a  pitch  of  125  degrees,  because  his  is  not  the  store 
which  the  public,  tolerantly  standing  for  it  in  the  past,  has  now 
decided  to  discount  in  every  way  in  its  attempt  to  arrive  some- 
where near  the  truth  hidden  under  the  bluster  of  its  advertise- 
ments. 

No,  indeed,  this  store  of  wliicli  I  speak  has  been  founded  on 
the  Abraham  Lincoln  principle,  and  so  words  in  this  store's 
advertising  are  to  be  taken  literally  as  expressing  the  absolute 
facts  they  plainly  state.  Each  adjective,  when  it  gets  into  this 
store's  advertising,  continues  to  hold  its  exact  shade  of  mean- 
ing, and  "reinarkable"  and  "unusual"  and  all  these  other  w^ords 
so  commonly  used  to  fill  space  are  used  under  this  store's  name- 
cut  only  when  the  sale  or  the  article  the  words  describe  are  just 
what  they  are  supposed  to  describe  and  nothing  else. 

As  I  am  creating  an  hypothetical  case,  I  think  I  have  a  right 
to  draw  still  further  upon  my  imagination  and  picture  to  you 
the  man  in  control  of  this  business,  who  makes  possible  this 
ideal  advertising  situation  because  he  is  in  control  of  it.^ 

He  is  a  big  man,  of  great  executive  ability,  with  an  infinite 
regard  for  detail  without  being  enmeshed  in  the  red-tape  of  too 
much  system.  He  is  a  man  of  imagination,  but  absolute  master 
of  his  dreams.  He  is  a  man  who  commands  the  respect  of  his 
associates  and  the  love  of  his  employees.  He  is  not  particularly 
a  financier,  for  he  doesn't  need  to  be.  He  isn't  doing  business  on 
borrowed  capital  or  bondholders'  money,  so  all  his  time  can  be 


ii 


64  PROGRESS  IN  RETAIL  ADVERTISING 

taken  up  with  being  a  merchant,  as  he  was  bom  and  brought 

His  work  of  a  day  begins  with  the  advertisement  or  that 
which  has  a  definite  bearing  on  the  advertising  and  ends  with 
the  advertising,  and  to  begm  and  end  his  day  in  this  wav  he 
hfsbuske         "**  possible  touch  with  every  essential  detail  of 

His  advertising  manager  is  one  of  his  close  associates  in  busi- 
ness.    This  advertising  manager  is  fully  capable  of  assuming 
Th.       f   Jl^  ^^P^^^^^^^^ties  that  have  been  put  upon  him, 
-Hyp^thet^  I^''.  ^^'^  business  general  long  ago  picked  his  adver- 
icarAd-    **^*"^.  manager  out  from  all  the  rest,  made  him  a  busi- 
tertmng     neps  intimate  and  instilled  in  him  the  policies  and 
Manager    principles  of  the  business  to  such  an  extent  that  he  is 
a  Imng,  breathing  expression  of  it. 
Aow,  this  well-liked,  hard-working  ruler  of  the  store's  destiny 
started  on  January  1st  with  a  fixed  amount  in  mind  to  be  spent 
for  that  year  s  advertising,  this  being  between  2i  and  3  per 
cent,  of  last  year  s  business.     It  has  been  divided  tentativdy 
into  twelve  parts— larger  or  smaller,  as  the  case  may  be,  to 
suit  the  needs  of  the  months  and  the  seasons. 

This  fund  is  absolutely  under  his  personal  control,  as  is  the 
appropriating  of  this  fund  among  the  different  departments, 
as  is  the  passing  upon  all  advertising  and  merchandising  mat- 
ters     His  IS  the  final  word  which  decides  whether  a  department 
shall  or  shall  not  advertise,  because  the  merchandise  does  or 
doesn  t  justify  it.     His  is  the  word  which  says:    "No   we  can- 
not  advertise  your  department  simply  because  you  need  busi- 
ness or  because  you  have  a  lot  of  old  goods  you  want  to  move  or 
because  you  had  an  advertisement  last  year.     Get  somethinic 
worth  while  that  you  know  the  public  wants  and  well  adver- 
tise It.     rake  your  own  loss  if  you  have  goods  that  are  not 
selling,  don  t  try  to  cover  up  your  mistakes  by  foisting  those 
undesirable  goods  on  the  public  and  adding  to  the  burden  of 
our  general  advertising,  even  to  lowering  the  confidence  the 
public  has  m  the  store  and  our  advertising,  and  possibly  de- 
ciding the  public  to  discount  our  printed  statements  hereafter  " 
And  so  this  really  great  business  general,  bemg  in  touch  everv 
minute  of  every  business  day  with  eveiy  detail  of  this  great 
business,  not  harassed  by  borrowed  finances,  free  from  entan- 
gling alliances  with  manufacturers,  ready  to  sell  anything  with 
merit  that  will  do  credit  to  the  store  provided  there  is  a  demand 


PROGRESS  IN  RETAIL  .NDVERTISING 


65 


for  it,  but  not  willing  to  sacrifice  one  single  precious  minute  of 
his  freedom  in  the  conduct  of  his  daily  business  affairs  or  in 
the  interpretation  of  the  store's  business  policy  or  principles 
by  any  outside  advertising  arrangement  or  other  sort  of  deal, 
can  control  the  destiny  of  his  business  and  so  control  the  store's 
advertising. 

(2)    USING   ADVERTISING  AS  A   WEAPON   IN   RETAIL 

COMPETITION 

A  serious  feature  of  the  operation  of  regular  retail  establish- 
ments is  the  meeting  of  competition  by  mail-order  houses  and 
other  concerns  which  sell  direct  to  the  consumer.  Advertising 
plays  its  part  in  this  type  of  activity.  The  hardware  mer- 
chants of  Ohio,  for  example,  recently  formulated  a  plan  for 
meeting  mail-order  competition  through  the  Ohio  Hardware 
Association.    The  campaign  proposed  is  thus  described: 

*Ohio  hardware  merchants  are  about  to  combat  mail-order 
competition  with  the  aid  of  newspaper  advertising,  according 
to  a  recent  interview  with  James  B.  Carson,  secretary  of  the 
Ohio  Hardware  Association,  which  appeared  in  the  Toledo 
Times. 

"These  big  mail-order  houses  advertise,  and  our  local  hard- 
waremen  must  advertise  to  compete  with  them,"  Mr.  Carson 
says.  "The  Ohio  Hardware  Association  at  its  Toledo  conven- 
tion, February  24,  25,  and  26,  hopes  to  give  this  matter  con- 
siderable attention.  We  plan  to  so  strengthen  our  county 
organizations  that  hardware  men  in  every  section  of  the  State 
will  not  only  advertise  the  goods  on  their  shelves,  but  will  buy 
space  in  the  newspapers  to  call  the  attention  of  the  residents  of 
their  communities  to  the  folly  of  sending  money  to  the  great 
cities  when  they  can  buy  goods  as  cheaply  or  cheaper  at  home, 
and  at  the  same  time  keep  their  money  within  home  circula- 
tion." 

The  Ohio  Hardware  Association  comprises  close  to  1,000 
merchants,  which  means  that  if  the  contemplated  action  takes 
place  and  works  out  well  it  can  probably  be  adopted  by  a  large 
number  of  associations  which  are  now  in  thirty-eight  States 
and  comprise  the  national  association. 

*Printers  Ink,  February  5,  1914,  p.  100. 


^1 


! 


60 


PROGRESS  IN  RETAIL  ADVERTISING 


Following  the  appearance  of  the  interview  with  Mr.  Carson 
m  the  Toledo  newspaper,  Printers"  Ink  asked  Mr.  Carson  to 
give  more  details  relating  to  the  proposed  local  newspaper  cam- 
paigns and  he  gave  the  following  interesting  reply: 

"I  note  what  you  say  in  regard  to  the  news  item  in  the  Toledo 
Times,  but  I  think  you  have  put  the  wrong  construction  as  to 
our  intentions,  as  I  am  sure  the  Ohio  Hardware  Association 
does  not  intend  to  wage  a  campaign  against  any  one,  but  it 
is  going  to  wage  one  for  itself. 

*'We  have  no  fight  with  anybody,  and  I  cannot  understand 
why  if  wc  adopt  modern  ways  and  means  to  take  better  care  of 
ourselves,  the  same  that  are  being  used  successfully  by  others, 
tliat  the  cry  should  go  forth  that  a  war  of  extermination  is 
going  to  be  carried  on  against  such  and  such  a  party,  whoever 
it  may  be. 

"There  is  no  doubt  that  the  newspapers  in  Ohio  do  more  in 
molding  public  opinion  than  all  other  forces  combined,  and  I 
am  sure  they  will  be  glad  to  lend  their  influence  in  building  up 
their  home  communities  if  we  will  work  hand  in  hand  with 
them.    This  our  merchants  must  do. 

"The  sentiment  of  the  hardware  dealers  in  every  State  is 
about  the  same,  and  the  awakening  is  not  confined  to  Ohio. 
Ror  are  the  troubles  of  Ohio  hardware  dealers  greater  than  those 
of  any  other  State,  but  our  merchants  have  come  to  the  conclu- 
sion that  one's  business  should  be  treated  as  one's  physical 
self,  and  when  there  is  trouble,  the  case  should  be  diagnosed 
and  the  remedy  applied." 

During  the  past  summer  the  National  Retail  Jewelers  Asso- 
ciation discussed  a  joint  advertising  plan  at  their  convention 
in  New  York  City.* 

This  type  of  operation  raises  the  question  of  the  legality 
under  the  Sherman  Law  and  the  special  correspondent  of 
Printers'  Ink  gives  the  following  report  of  an  effort  to  secure 
legal  sanction  of  this  type  of  activity: 

fls  a  retailer's  bureau  of  information,  in  any  sense,  a  menace 
to  the  manufacturer  or  the  jobber,  or  could  it  prove  a  factor 

*Printers  Ink\  September  2,  1915,  p.  05. 
\PritUer$   Ink,  April  30.  1914,  p.  93. 


PROGRESS  IN  RETAIL  ADVERTISING  67 

that  could  disturb  existing  methods  of  distribution  and  sales? 
This  is  a  question  which  manufacturers  and  advertisers  m 
certain  lines  may  well  ask  themselves,  because  the  right  of 
organized  retailers  to  maintain  information  bureaus  for  the 
dissemination  of  confidential  news  as  to  trade  policies,  etc.,  is 
rapidly  developing  into  an  issue  as  clear-cut  as  legalized  price- 
maintenance,  the  proposed  taxation  of  tobacco  and  other  cou- 
pons, or  any  of  the  other  questions  which  have  been  brought 
before  Congress  at  the  present  session,  with  a  view  to  the  se- 
curance  of  legislation  which  will  indicate  to  business  men  ex- 
actly where  they  stand. 

Retail  merchants,  especially  the  classes  of  retailers  who  are 
banded  together  in  national  organizations,  are  pressing  Con- 
gress for  specific  authority— in  the  form  of  either 

Where      new  legislation  or  amendments  to  existing  acts — to 
Chain-store  circulate    information    for    their    mutual    advantage 

Enfen  and  protection.  In  their  representations  before 
Congress  they  disclaim  any  intention  to  conduct  boy- 
cotts, and  take  the  stand  that  there  can  be  no  more  valid  objec- 
tion to  information  bureaus  than  there  is  to  credit  bureaus, 
which  associations  of  retailers  are  now  permitted  to  maintain. 
At  the  same  time  the  spokesmen  of  the  merchants  at  Wash- 
ington have  let  it  be  inferred  that  one  of  the  objects  of  the 
average  information  bureau  would  be  to  spread  knowledge  of 
the  acts  of  manufacturers  or  jobbers  who  sell  to  mail-order 
houses  at  the  same  time  that  they  seek  distribution  through 
ordinary  channels  or  who  openly  or  secretly  maintain  chain- 
store  systems  in  competition  with  independent  retailers.  This 
phase  of  the  question  will  make  clear  the  application  of  the 
whole  subject  to  the  broad  interests  of  makers  and  advertisers 

of  goods.  .  .    . 

Perhaps,  however,  the  chief  significance  of  this  matter  is  in 
the  increasing  probability  that  the  retailers  may  secure  the 
authority  they  seek.  So  strong  have  been  the  representations 
made  at  hearings  before  the  House  Committees  on  Judiciary 
and  Interstate  and  Foreign  Commerce  that  there  is  a  growdng 
impression  in  Congressional  circles  that  if  any  legislation  along 
this  line  is  recommended  some  effort  will  be  made  to  satisfy 
the  small  merchants  Avho  would  use  concerted  action  in  buying 
as  a  weapon  of  offence  and  defence.  Not  the  least  interesting 
feature  of  the  situation  that  has  developed  is  found  in  the  seem- 
ing willingness  of  some  of  the  retailers  to  sacrifice  their  convic- 


1-1 


li 


Says 

Retailers' 

Hands 

Are  Tied 


PROGRESS  IN  RETAIL  ADVERTISING 

tions  as  to  the  manufacturer's  right  to  fix  a  resale  price  in  order 
to  obtain  concessions  for  the  circulation  of  trade  information. 
In  their  answers  to  questions  asked  by  Congressmen  several 
of  the  spokesmen  for  the  retailers  have  indicated  that  they  put 
the  right  to  conduct  an  information  service  above  compulsory 
price-maintenance,  although,  in  some  instances,  in  favor  of  the 
latter  also. 

In  stating  the  grievance  of  the  retailers,  J.  R.  Moorehead, 
National  Secretary  of  the  Retail  Merchants  Association  of  the 
United  States,  said:  "When  I,  for  instance,  with  my 
competitors,  undertake  to  get  together  in  an  organi- 
zation or  an  association  to  combat  the  methods  of 
the  mail-order  houses,  we  can  get  into  a  conspiracy; 
but  we  may  be  fighting  one  man  and  he  cannot  get 
into  a  conspiracy;  he  cannot  violate  the  law,  but  he  can  say  to 
us,  *If  you  interfere  with  my  business  and  my  methods  of  busi- 
ness I  mil  hold  you  responsible  under  the  Sherman  anti-trust 
law';  and  our  hands  are  tied.     We  cannot  even  tell  the  truth. 

"I  want  the  right  to  give  publicity— through  organizations 
or  personally;  in  any  way,  by  publication  or  by  letter— to  any 
act  of  any  competitor  that  tends  to  injure  me  in  my  business. 
The  fact  that  I  would  have  the  right  to  say  to  a  hundred  or  a 
thousand  men,  dealers  in  my  line  of  business,  that  such  and 
such  a  manufacturer  or  mail-order  house  has  done  such  and 
such  a  thing,  knowing  it  to  be  the  truth,  would  help  to  correct  a 
condition  a  great  deal  easier  than  a  lawsuit.  If  I  did  not  tell 
the  truth  he  would  have  action  against  me  for  libel,  but  when 
I  am  telling  the  truth  I  do  not  believe  the  Sherman  law  should 
say  you  are  violating  the  law,  when  the  big  fellow  cannot  violate 
It,  claiming  he  is  doing  it  by  himself.  We  do  not  desire  to  keep 
a  blacklist.  Here  is  the  proposition:  Dun  or  Bradstreet  can 
report  me  for  not  paying  a  debt  or  being  slow  pay  and  things 
of  that  kind  that  would  absolutely  ruin  my  credit.  But  when 
I  come  back  and  attempt  to  speak  the  truth  about  a  matter  of 
this  kind  I  am  confronted  with  the  Sherman  law  and  I  cannot 
fight  it  by  myself;  I  cannot  afford  to.  We  understand  the 
mail-order  house  is  here  to  stay  forever.  We  have  got  to  fight. 
We  are  up  against  severe  competition,  and  we  welcome  that 
competition,  but  the  thing  we  want  is  a  chance  to  fight  back, 
and  we  do  not  want  our  hands  tied." 

The  anxiety  of  the  retailers  on  this  score  has  been  precipitated 
largely  because  of  the  action  of  the  Department  of  Justice  some 


PROGRESS  IN  RETAIL  ADVERTISING 


69 


time  since  in  bringing  action  against  certain  retail  lumber  asso- 
ciations for  alleged  violations  of  the  anti-trust  law.  The  his- 
tory of  this  case  has  been  gone  into  very  extensively  at  the 
Congressional  hearings,  it  being  explained  that  the  indictments 
against  the  secretaries  of  the  associations  have  been  withdrawn 
in  the  criminal  case,  but  that  a  civil  suit  is  still  pending.  The 
assertion  was  made  repeatedly  at  the  hearings  that  these 
indictments  were  procured  by  competitors  of  the  organized 
retailers.  It  was  also  asserted  by  one  witness  that  the  Govern- 
ment case  was  the  outgrowi:h  of  the  organization  of  the  Secretaries 
Bureau— a  bureau  of  the  secretaries  of  various  trade  associations 
which  had  as  their  common  object  the  dissemination  of  informa- 
tion with  respect  to  manufacturers  and  mail-order  houses. 

In  answer  to  a  question  from  Congressman  Volstead,  of  the 
Judiciary  Committee,  Mr.  Bolman,  of  the  Southwestern  Lum- 
ber Dealers'  Association,  said:  "We  do  not  want  to  publish  an 
unfair  list.  I  have  been  a  member  of  associations  for  seven 
years  and  a  director  for  several  years.  I  have  never  heard 
during  my  membership  or  during  my  directorship  any  discussion 
of  the  question  of  division  of  territory  or  the  setting  of  prices  or 
of  a  boycott.  I  think  the  association  would  not  object  if  the  law 
specifically  prevents  any  attempt  at  a  boycott  or  combination." 

"What  you  wish,"  questioned  Congressman  Nelson,  "is  the 
right  to  disseminate  information  that  will  make  it  impossible 
for  a  jobber  or  wholesaler  to  sell  to  the  consumer,  and  the  con- 
sumer would  have  to  buy  from  the  retailer,  or  else  the  whole- 
saler would  be  punished  by  your  withdrawal  of  patronage?" 

"  Certainly,"  said  Mr.  Bolman. 

"That  would  result,"  pursued  Congressman  Nelson,  "in 
every  retailer  knowing  what  is  being  done  so  that  he  can  with- 
draw his  patronage  from  the  wholesaler  who  is  selling  direct  to 
consumers?" 

"That  would  be  within  the  choice  of  the  retailer,"  said  Mr. 
Bolman. 

(2)  THE  CHANGES  BROUGHT  ABOUT  BY  SUCCESSFUL  RETAIL  AD- 
VERTISING 

Before  entering  upon  a  discussion  of  the  place  of  regular 
retailers  in  national  advertising  campaigns  it  may  be  well  to 
look  at  one  or  two  special  features  of  the  retailer's  skill  in  doing 
business  as  it  afl^ects  national  advertising. 


f 


i 


70  PROGRESS  IN  RETAIL  ADVERTISING 

One  thought  to  which  it  is  necessary  to  give  due  considera- 
tion IS  the  fact  that  any  really  skilful  retailer  is  in  process  of 
development  and  will  need  to  be  pr%ressively  better  dealt  with 
every  year.  Not  many  of  these,  of  course,  will  expand  rapidly 
into  concerns  doing  a  large  national  business,  but  the  following 
account  of  how  a  local  merchant  became  a  national  advertiser 
on  his  own  account  in  an  incredibly  short  time  will  serve  to 
emphasize  the  fact  that  the  same  fluidity  of  conditions  which 
were  discussed  in  regard  to  the  consumer  must  be  considered 
in  connection  with  the  retailer. 

*Eliminate  advertising  and  you  reduce  buying  to  its  barest 
bread-and-butter  basis." 

** Advertising  will  convert  the  luxury  into  a  necessity." 

^Advertising  makes  buying;  without  it,  you  must  sell." 
Advertising  is  the  pendulum  that  regulates  and  keeps  manu- 
facturing, retailing,  and  final  buying  in  motion." 

These  were  some  of  the  epigrammatical  utterances  of  J.  J 
Phoenix,  the  president  of  the  Bradley  Knitting  Company,  of 
Delavan,  ^\is.  Thus  the  head  of  a  big,  prosperous  manufactur- 
ing estabhshment  expressed  himself  on  the  subject  of  advertis- 
ing. 

But  not  until  one  learns  the  story  of  the  Bradley  Knitting 
Company  can  there  be  a  full  appreciation  of  these  pointed,  de- 
cisive statements.  Mr.  Phoenix  did  not  confine  himself  to  ad- 
vertising as  It  related  to  the  manufacturer.  He  committed 
himself,  authoritatively,  as  a  producer,  as  a  retailer,  and  as  a 
consumer.  And  he  does  not  have  to  use  the  past  tense  in  dis- 
cussing conditions  in  this  triple  role  as  a  maker,  dealer,  and 
Imal  buyer.  He  is  the  president  of  the  Bradley  Knitting  Com- 
pany a  partner  of  the  Bradley  Dry  Goods  Store,  and,  naturallv, 
a  daily  consumer-buyer.     ... 

Nn,         .  Aboutfourteenyears  ago  a  small  knitting  factory  was 

Succelful    ^^^^^^^  f  ^^  outlying  Chicago  neighborhood.     A  Ger- 

at  the       ™^°'  Who  was  familiar  with  the  knitting  process  and 

Start       had  a  thorough  technical  knowledge  of  knitting   but 

who  knew  very  little  about  selling,  was  the  owner. 

He  made  arrangements  with  a  Chicago  jobber  to  take  his 

*Pnnters  lnk\  May  7,  1914,  p.  3 


PROGRESS  IN  RETAIL  ADVERTISING 


71 


entire  output.  Although  he  disposed  of  all  of  the  sweaters  and 
other  knit  goods  that  were  made,  the  undertaking  was  not 
successful.  In  the  first^lace,  the  goods  were  sold  at  too  close  a 
price,  and  secondly,  the  owner  of  the  factory  knew  nothing  of 
the  economical,  efficient  systems  and  methods  of  conducting  a 
manufacturing  business. 

In  a  little  over  two  years  the  business  was  on  the  verge  of 
bankruptcy.  While  on  a  buying  quest  for  his  retail  store  Mr. 
Phoenix  visited  the  wholesale  house  that  was  selling  the  goods 
of  the  knitting  concern.  "Why  don't  you  take  over  this  knit- 
ting business .''"  it  was  suggested.  "You  ought  to  be  able  to 
build  up  a  big  manufacturing  business  in  Delavan."  Mr. 
Phoenix  and  his  partner,  W.  H.  Tyrell,  after  a  careful  investi- 
gation of  the  knitting  factory  in  question  and  of  the  possibifities 
of  this  business,  decided  to  buy  it  and  remove  it.  to  their  home 
town. 

"There  were  three  things  which  prompted  us  to  go  into  this 
business.  First  of  all,  we  saw  the  necessity  of  having  some  kind 
of  a  manufacturing  business  in  Delavan  to  give  employment 
to  the  young  men  and  women  and  boys  and  girls  who  would 
otherwise  drift  to  the  surrounding  cities.  We  wanted  to  help 
build  up  our  town,  give  it  a  more  solid  foundation,"  Mr.  Phoe- 
nix explained.  "Then,  of  course,  the  money-making  idea  was 
a  strong  inducement.  We  were  pretty  sure  we  could  make  a 
financial  success  of  it.  Lastly,  we  determined  to  go  into  it 
just  to  prove  to  the  many  men  who  strongly  advised  against  it 
that  we  could  make  it  go. 

"Well,  we  began  in  a  small  two-story  brick  building  in  1902. 

We  employed  the  original  owner  as  our  manager.     We,  Mr. 

Retailers     Tyrell  and  myself,  devoted  most  of  our  time  to  our 

Lay  out  retail  store.  The  manufacturing  business  lost  heavily 
Maniifac-    the  first  two  years.     The  goods  were  sold  to  jobbers 

^nng  only.  It  was  finally  decided  that  the  business  was 
ounes  i^jgijig  mismanaged,  so  we  let  the  manager  go  and 
Mr.  Tyrell  and  I  went  into  it  more  actively.  We  knew  retailing 
pretty  thoroughly.  We'd  been  at  it  for  many  years  and  had 
built  up  a  splendid  business.  But  we  knew  very  little,  scarcely 
anything,  about  manufacturing. 

"I  remember  how  discouraged  I  was  when  I  went  to  New 
York  to  consult  with  some  trade-paper  men  whom  I  had  known 
for  a  long  time.  When  they  explained  the  conditions  in  the 
knitting  industry,  how  many  competitors  we  had,  how  we  would 


n 


PROGRESS  IN  RETAIL  ADVERTISING 


PROGRESS  IN  RETAIL  ADVERTISING 


73 


have  to  compete  with  very  cheaply  made  lines  and  with  long- 
established,  high-grade  Hnes,  it  didn't  look  very  rosy. 

"You  see,  as  retailers,  we  subscribed  for  the  leading  trade 
journals  and  used  them  and  the  service  of  the  men  connected 
with  them  in  every  possible  way.  On  my  twice-a-year  New 
York  buying  journeys  I  always  went  to  the  offices  of  a  big  dry- 
goods  trade  paper  and  advised  with  its  men  regarding  our  store 
and  the  l>est  way  to  conduct  it.  In  this  way  I  got  to  know 
them  intimately  and  went  right  to  them  when  we  undertook 
the  knitting  business.  And,  by  the  way,  let  me  say  that  I 
consider  the  trade  paper  one  of  the  principal  factors  in  success- 
ful retaihng.  The  merchant  who  reads  and  studies  a  good  trade 
paper  and  takes  advantage  of  its  assistance,  like  we  did  and 
still  do,  has  everything  in  his  favor.  He  can  thus  find  out  from 
an  authentic  source  the  latest  and  best  and  most  economical 
methods  by  which  to  conduct  his  store.  He  learns  what  others 
are  doing.  He  can  find  out  everything  about  the  merchandise 
he  sells.  And  he*s  able  to  get  the  personal  help  and  advice  of 
experienced,  able  men.  To  try  to  run  a  retail  store  without 
the  trade  journals  is  to  close  yourself  off  from  almost  all  that 
IS  new,  and  to  ignore  the  experiences  of  others.  The  Bradley 
Drygoods  Store  owes  much  of  its  success  to  the  trade  papers. 
It  was  the  practical  advice  of  these  trade  papers  which  I  im- 
mediately sought  when  we  undertook  to  operate  the  Bradley 
Knitting  Company  ourselves. 

"It  was  first  decided  to  eliminate  the  jobber  as  a  sales  agent 
and  to  approach  the  retailer  directly.     The  first  year  of  our 

F    ak      ^^^^^^  ^^^^  w^  a  ^oss,  but  much  less  than  before. 

X  *     '^^^  second  year  also  showed  a  loss,  but  very  much 

Jobber  decreased.  In  the  ten  subsequent  years,  up  to  the 
present  time,  the  Bradley  Knitting  Company  has 
been  a  paying  institution.  From  a  two-story,  140-foot-long 
building,  it  has  expanded  into  a  foiu--story,  400-foot-long  struc- 
ture. We  now  have  ^ve  selling  branches  and  two  other  manu- 
facturing branches.  When  we  began  business  the  total  sales  of 
the  knit-wear  industry  ranged  between  five  and  six  millions. 
That's  twelve  years  ago.  Now  it's  up  to  fifty  and  sixty  millions. 
We  feel  we  have  been  instrumental,  in  a  small  way,  in  thus  in- 
creasing the  demand  for  knit  goods. 

"We  were  in  a  peculiarly  favorable  position  to  plan  our  cam- 
pigns  to  get  dealer  distribution.  We  could  analyze  retail  buy- 
ing clearly  and  practically  at  first  hand.     We  had  only  to  reason 


out  why  we,  as  retailers,  had  bought  and  continued  buying  of 
certain  manufacturers  and  why  we  did  not  buy  of  others.  We 
could  figure  out  pretty  well  how  to  approach  the  retailer,  for  we 
knew  what  approaches  had  won  our  interest  and  business.  We 
knew  what  the  retailer  expected  from  the  producer  or  wholesaler 
and  what  he  wouldn't  tolerate.  For  we  knew  what  had  helped  us 
and  what  hadn't.  W^e  knew  how  trade-journal  advertising  and 
consumer  advertising  affected  our  retail  actions. 

"In  short,  we  made  two  composites — one  of  the  manufac- 
turers who  had  used  good  selling  methods  according  to  our 
views,  and  the  other  of  those  concerns  which  did  not 
Com^^sUes succeed  with  us  and  the  practices  of  which  we  consid- 

ompos  ««^j.^^  weak.  We  adopted  as  far  as  possible  the  plans 
of  the  former  and  took  care  to  avoid  the  policies  of  the  latter. 

"Our  position,  you  see,  was  unique.  Right  at  our  door — 
the  door  of  our  retail  store — we  had  every  practical  and  unprac- 
tical selling  method  from  which  to  make  our  selection.  That 
we  were  fortunate  enough  to  put  out  the  very  best  methods 
and  apply  them  effectively  is  pretty  well  demonstrated  by  the 
fact  that  for  the  last  seven  of  the  twelve  years  we  have  been  in 
this  knitting  business  we  have  had  more  orders  than  we  could 
fill.  Our  capacity  has  been  taxed  to  its  very  limit.  This 
capacity  business  has  been  done  under  rather  imfavorable 
external  conditions.  We  resolved  from  the  start  to  make  only 
high-grade  goods.  Inasmuch  as  the  knitting  industry  has 
never  been  standardized,  as  most  other  manufacturing  busi- 
nesses are,  there  never  has  been  any  uniformity  in  prices  or 
goods.  The  variation  in  price  of  knit  wear  of  a  given  grade  was 
so  marked  that  the  retail  buying  had  been  seriously  under- 
mined. Then  buying  was  largely  a  matter  of  bargaining. 
Prices  were  ruthlessly  slashed  by  the  manufacturer  in  order 
to  make  sales.  Conditions  are  somewhat  better  now,  but 
things  were  pretty  bad  as  we  originally  faced  them.  And  be- 
sides, there  were,  as  there  are  now,  some  very  cheaply  made, 
low-priced  knit  goods  with  which  we  had  to  compete 

"I  credit  our  success,  despite  these  and  many  more  handi- 
caps, to  one  basic  fact,  the  good  will,  the  harmonious  relation- 
ship that  we  established  with  the  retailers  distributing  our  goods. 
Given  the  best  merchandise  and  prices,  the  most  convincing 
advertising  campaigns  that  can  be  planned,  good  salesmen,  in 
fact  everything  favorable,  except  the  retailer— and  there's 
ninety-nine  chances  out  of  a  hundred  that  a  selling  campaign 


5 


* 


I 


74  PROGRESS  IN  RETAIL  ADVERTISING 

will  be  a  failure.  But  throw  up  every  obstacle  you  can,  make 
conditions  as  hard  as  possible,  if  you  can  get  the  retailer  in 
harmony  with  your  selling,  get  him  to  work  with  you  earnestly 
and  willingly  and  you  can  reverse  the  ratio— there'll  be  but 
one  chance  out  of  a  hundred  of  failure. 

Trade  "^^  ^^^  appear  as  if  I  am  unduly  prejudiced  in 
Journals  favor  of  the  retailer  because  I  have  been  one  so  long 
rZlmu  ^y^^^^^  ^^^  ^^  still  a  retail  merchant.     It  may  be  so; 

of  Retailers  ^^^  ^^^  ™^  ^^^  ^^^^  *^^^  ^^  pursuing  this  policy  of  put- 
tmg  every  possible  effort  on  the  dealer  to  win  him 
over  the  Bradley  Knitting  Company  owes  its  very  existence  to- 
day. 

.  .  .  The  trade  paper  and  the  salesmen  were,  and  are  now, 
our  only  means  of  approach  to  the  retailer.  From  the  reports 
of  our  salesmen  and  from  the  inquiries  and  orders  from  our  trade- 
journal  advertising,  we  can  see  definitely  and  tangibly  the  results 
this  advertising  is  bringing. 

"We  do  very  little  talking  in  our  trade-paper  advertising, 

and  what  we  do  say  is  simple,  direct,  and  free  from  buncombe. 

Hmc  Copy    Illustrations  of  knit  wear,  descriptions  and  price  quo- 

Was        tations  are  the  dominant  characteristics  of  this  copy. 

^O^^^  The  trade  paper  will  sell  goods  just  like  a  salesman,  we 
find.  The  dealer  isn't  interested  in  what  you've 
got  to  say  about  yourself  or  the  possibility  of  business  and 
profits  from  your  goods.  He  wants  to  know  about  the  goods 
themselves.  Our  trade-paper  advertising  brings  in  actual 
orders  because  we  use  it  for  that  purpose — to  solicit  orders. 

"By  dealer  distribution,  I  don't  mean  simply  selling  to  the 
retailer.  The  fact  that  a  retailer  has  our  goods  in  stock  is  not 
sufficient.  Our  interpretation  of  *  dealer  distribution'  is  to 
have  the  merchant  a  working  principal  in  the  selling  of  Bradley 
knit  wear.  You'll  find  that  the  men  who  retail  our  goods  are 
strongly  with  us  and  our  business  methods  and  that  they  are 
pushing  the  sales  of  our  knit  wear  vigorously  and  enthusiasti- 
cally. We  have  gained  this  standard  of  distribution  by  square, 
fair  dealing  with  the  retailer  and  by  pursuing  certain  policies 
that  have  won  for  us  their  highest  favor. 

"Our  policy,  that  we  have  found  to  be  extremely 
profitable,  is  to  give  exclusive  selling  rights  to  one 
store  in  each  small  or  average-sized  community  as 
far  as  possible.     The  attitude  of  the  dealer  determines 
this  to  a  great  extent.     If  he  shows  an  interest  in  our  goods,  a  will- 


PROGRESS  EST  RETAIL  ADVERTISING 


75 


Prnfitahle 

Trade 
Policiea 


ingness  to  do  all  he  can  to  promote  their  sale,  he  can  have  the  ex- 
clusive agency.  We  encourage  this  idea  in  every  possible  way. 
The  merchant  who  has  the  sole  privilege  of  selling  any  goods 
is  in  a  position  to  do  far  more  than  if  they  are  sold  generally 
to  other  competing  stores.  V.e  know  this  is  the  case  of  the 
retailers  selling  Bradley  knit  wear  and  it  is  the  case  with  our 
retail  store.  We  are  glad  to  advertise  in  every  way  the  mer- 
chandise that  our  retail  store  sells  exclusively.  Then  we  know 
all  returns  will  come  to  us,  not  our  competitors.  A  dealer  can]t 
possibly  let  himself  out  in  the  advertising  of  goods  that  his 
competitors  also  sell  and  who  would  get  some  benefit  from 
it.  We  find  that  one  dealer  alone  can  do  more  to  establish 
our  goods  in  a  town  and  in  selling  volume  than  two  or  three  in 
the  same  town.  And  it  costs  us  much  less  to  handle  the  one 
account  than  the  two  or  three. 

"Our  actions  on  price-maintenance  is  another  policy  that  has 
made  the  dealers  friendly  toward  us.      This  wasn't  any  easy 

problem  to  solve  by  any  mean^.     There  must  be  some 

How  Price   attempt  at  price-standardization.     There   must   be 

^w7re       some  semblance  of  uniformity  in  retailing  as  well 

Dealt  With  as  manufacturing.     If  dealers  vary  too  much  in  price 

quotations,  the  consumers  will  soon  be  always  bar- 
gain-hunting, and  that  is  bad.  Yet  the  retailers,  selling 
under  such  different  conditions,  as  many  of  them  do,  cannot 
sell  at  the  very  same  prices.  We  do  not  expect  the  retailer  of 
the  Western  coast  to  sell  Bradley  Iviiit  wear  at  the  same 
price  as  our  Illinois  or  Middle  ^^  est  States'  dealers,  whose 
transportation  and  general  *  over-head'  charges  are  so  much 
lower. 

"Nor  do  we  expect  a  merchant  who  has  some  numbers  in 
his  stock  that  do  not  sell  readily  to  maintain  the  prices.  He's 
justified  in  cutting  prices  unless  we  are  willing  to  take  them 
back.  We  issue  catalogues  for  the  wearer  in  which  retail  prices 
are  quoted.  Prices  are  also  mentioned  in  our  general  advertis- 
ing. But,  if  the  dealer  wishes  to  vary  from  these  prices,  it  is 
his  business  and  he  has  a  right  to  do  so.  In  several  cases  we 
tried  to  get  dealers  to  maintain  given  retail  prices,  but  it  led 
to  so  much  misunderstanding  that  we  let  it  drop.  Now,  know- 
ing that  they  can  manipulate  prices  as  they  wish  without  inter- 
ference, most  of  our  retailers,  and  we  have  over  seven  thousand 
of  them  distributing  our  goods,  seem  contented  to  sell  at  the 
prices  we  suggest. 


76 


PROGRESS  IN  RETAIL  ADM:RTISING 


PROGRESS  IN  RETAIL  ADVERTISING 


rt 


M 


i 


...1 


1 


Due  to  broad  policies,  such  as  these,  we  were  able  to  gain 
a  widespread,  favorable  dealer  distribution.  Then  we  were 
ready  for  consumer  advertising.  I  won't  even  dare  guess  how 
many  possible  sales  have  been  lost  at  our  retail  store  for  newly 
advertised  goods  which  were  given  publicity  before  we  could 
get  them. 

"I  ani^  strong  for  general  ad^^ertising  in  its  proper  sequence. 
When  It  s  employed  at  the  right  time  and  in  the  right  way, 
there  s  no  limit  to  its  possibilities  in  producing  sales.  But 
when  a  concern  begins  to  advertise,  to  build  up  a  demand  for 
Its  goods  before  it  has  built  up  the  proper  distribution,  it  is  a 
wasteful,  extravagant  indulgence.  This  is  a  mistake  that  too 
many  advertisers  are  committing.  The  theory  is  that  adver- 
tising in  general  magazines,  newspapers,  etc.,  establishes  dis- 
tribution at  the  same  time  it  creates  a  consumer  demand.  It 
does  to  a  small  measure,  but  I  should  say  that  about  80  per 
cent,  of  it  is  wasted.  The  inquiries  for  advertised  goods  are 
immediate.  They  begin  to  come  in  the  very  day  the  adver- 
tising appears.  It  may  be  from  two  to  three  days  or  two  to 
three  weeks  before  the  retailer  can  get  the  merchandise. 

I  can^t  urge  this  too  emphatically:  Get  distribution  first- 
then  go  after  the  buyers.  That  will  reduce  waste  to  a  minimum 
and  promote  sales  to  the  maximum. 

"This  is  being  clearly  shown  in  our  campaigns.     When  we 
began  advertising  we  had  a  good  dealer  distribution.     W'hen  we 
receive  mquiries  for  our  booklets  from  men  and  women,  we 
send  the  literature  and  tell  them  who  sells  our  goods  in  their 
vicinity.     We  write  the  retailer  about  the  inquiry,   too.     As 
far  as  we  are  able  to  trace  these  inquiries,  I  judge  that  probably 
70  per  cent,  are  turned  into  sales.     For,  you  see,  we  have  the 
dealer  actively  with  us,  and  he  uses  his  local  influence  in  con- 
nection with  the  interest  or  demand  we  have  aroused.     .     .     " 
In  answer  to  the  question,  "What  do  you  do  in  co-operation 
help  for  your  dealers?"   Mr.   Phoenix  said:      "There  is  too 
much  being  done  in  dealer  work  by  the  average  manufacturer. 
In  our  role  as  retailers,  we  find  this  so.     In  the  attempt  to 
tie-up   the  retailer  to  a  line,  the  manufacturers  are  hampering 
him  in  his  local  selling.     They  are  surrounding  him  with  sug- 
gestions, directions,  and  ideas  that  may  or  may  not  be  best  for 
bis  locality.     If  you  could  see  the  accumulation  of  stuff  that 
a   drygoods   store  like  ours  gets  from  various  manufacturers 
from  whom  we  buy,  you'd  quickly  realize  the  usclessness  of 


most  of  it.  We  don't  use  one  tenth  of  it;  we  can't.  We  want 
to  talk  to  our  town  p)eople  ourselves;  we  can't  afford  to  talk  to 
them  through  the  mouthpieces  of  the  manufacturers,  the  cards, 
posters,  newspaper  electros,  etc. 

"Knowing  this  so  well  from  our  own  experience  in  retail- 
ing, we  are  very  particular  what  we  give  out  and  we  give 
very  little.  We  help  the  retailers  in  every  possible 
Cautions  ^^y  we  can,  but  we're  careful  not  to  overdo  it.  It's 
^Co-overa-   ^^^^^  ^^  P^^  cent,  more  to  us  to  have  the  retailer 

Hon  p>ersonally  recommend  and  endorse  our  knit  wear 
than  if  we  told  the  consumer  what  fine  goods  we  make. 
I  would  prefer  to  have  the  retailer  make  the  one  short  statement 
to  a  possible  buyer,  *  Bradley  knit  wear  is  the  most  reliable  and 
serviceable  you  can  buy,'  than  have  the  same  possible  buyer 
read  an  advertisement  of  five  hundred  words  over  our  signature. 
That  one  remark  from  the  merchant  or  his  clerks  will  do  quicker, 
more  certain  work  than  all  we  could  say  about  our  goods. 
When  customers  go  to  a  store  they  do  so  because  they  have 
confidence  in  that  store.  So,  most  generally,  whatever  is  said 
there  in  favor  of  any  goods  is  accepted  and  acted  upon.  W^hat 
an  advertiser  says  about  his  own  goods  does,  without  doubt, 
make  a  deep  impression  and  arouses  a  desire,  but  there's  some- 
thing lacking  that  is  necessary  to  make  a  sale;  that  *  something' 
is  what  the  retailer  supplies,  the  personal  assurance  of  some  one 
that  the  goods  are  as  advertised. 

"In  our  retail  business  this  situation  makes  itself  evident 
every  day.  Customers  come  to  our  store  and  ask  about  some 
advertised  merchandise.  They  come  in  a  favorable  mood  to 
buy.  Advertising  is  directly  responsible  for  this  mood.  But  one 
tenth  of  1  j>er  cent,  ask  directly  for  the  goods  they  are  prepared 
to  buy.  They  wait  for  the  clerk  to  strengthen  their  buying 
inclination.  They  don't  come  out  decidedly  and  buy  an  article. 
They  make  some  kind  of  an  inquiry  about  it  first,  giving  the 
clerk  the  opportunity  to  put  in  his  closing  selling  talk  that 
usually  makes  the  sale. 

"I've  studied  our  retail  customers  very  closely  and  carefully 
in  regard  to  this  one  point  and  know  how  they  act  in  their  buy- 
ing. It's  up  to  the  retailer  to  make  the  sale.  The  advertising 
does  everything  up  to  the  actual  exchange  of  money  for  mer- 
chandise— there's  where  it's  necessary  to  insert  a  personality — 
the  retailer — to  close  up  the  sale. 

"Acting  in  the  double  capacity  as  manufacturers  and  re- 


78 


PROGRESS  IN  RETAIL  ADVERTISING 


3' 


tailers,  we  are  able  to  gauge  conditions  and  conduct  our  pro- 
ducing business  on  a  very  practical  basis. 

"UnJe:-  no  circumstances  do  we  sell  by  mail  to  any  inquirer; 
nor  will  we  sell  to  mail-order  houses.  We  were  approached  by 
one  large  mail-order  house  that  offered  to  take  over  our  entire 
output  each  season,  but  we  quickly  and  flatly  refused  even  to 
discuss  terms  with  it.  As  long  as  we  are  distributing  through 
the  retailer  we  will  have  nothing  to  do  with  the  mail-order 
selling.  You  can't  play  the  game  from  both  ends  and  win  out. 
The  manufacturer  who  doesn't  protect  his  retail  distributors 
at  every  possible  angle  is  only  handicapping  his  own  business. 
The  small-town  merchant  is  too  valuable  a  factor  in  our  business 
to  slight  in  any  way.  This  brings  me  to  a  subject  that  I  con- 
sider one  of  the  most  important  in  the  building  of  a  manu- 
facturing business — the  small  town. 

"Being  a  small-town  resident  and  a  small-town  retailer  my- 
self, I  know  conditions  there  rather  well.  Being  a  manufac- 
turer, I  also  am  familiar  with  the  situation  in  the  large  cities. 
We  do  not  go  after  the  big-city  business  with  nearly  as  much 
force  and  energy  as  the  trade  of  the  small  and  average-sized 
towns.  City  business  is  far  more  costly  to  get  and  it  repre- 
sents the  smaller  per  cent,  of  our  population.  It's  harder  to 
handle  and  much  more  exacting.  The  big  volume  of  our  busi- 
ness comes  from  the  smaller  towns.  It's  simpler  to  get,  easier 
to  hold  if  you  treat  it  right,  and  has  more  business  for  you. 
There's  a  bigger  profit  in  it  because  it's  less  expensive  to  handle. 
"We  have  been  fortunate  in  having  an  excellent  advertising 
agency  to  help  us.  The  guidance  of  our  advertising  agency 
has  kept  us  away  from  many  pitfalls  and  has  provided  us  with 
strong  selling  campaigns  that  have  been  very  successful.  I 
can't  see  how  a  business  that  makes  a  good  article  can  possibly 
fail  if  it  places  its  selling  affairs  under  the  advice  and  help  of  a 
trade-journal  and  an  advertising  agency.  A  business  to-day 
has  at  its  command  the  service  of  experienced  men  who  know  how 
to  proceed,  what  to  do,  and  what  not  to  do  in  business  building. 
The  Bradley  Knitting  Company  is  a  good  example  of  this." 

Hugh  Mc^/ey  of  Successful  Fanning,  Des  Momes,  la., 
brmgs  out  one  other  phase  of  the  bearing  of  the  individual 
merchant's  skill  upon  the  national  advertiser's  plans.  The 
thought  which  underlies  this  article  by  Mr.  McVey  is  the  fact 


PROGRESS  IN  RETAIL  ADVERTISING 


79 


that  it  is  dangerous  to  forget  that  relations  with  retail  merchants 
are  in  a  large  measure  individual  problems  and  that  it  is  not  al- 
together safe  to  proceed  too  far  upon  generalizations.  Mr. 
McVey  says: 

♦Some  firm  is  going  to  make  a  big  winning  one  of  these  days 
by  comparing  and  compiling  the  methods  used  by  different 
active  retailers  and  spreading  the  service  broadcast  throughout 
the  agricultural  States.  I  have  interviewed  over  400  retail 
dealers  in  the  North  Central  States  and  have  come  to  the  con- 
clusion that  manufacturers  have  scarcely  begun  to  develop 
the  sales  possibilities  of  merchants  in  small  communities. 

I  know  many  instances  where  live  retailers  are  working  out  the 
problems  of  their  trade  and  have  devised  plans  that  might  be 
profitably  used  by  small-town  dealers  generally  if  some 
manufacturer  would  take  up  the  ideas  and  encourage  their 
use. 

There  is  H.  G.  Larimer,  clothier  of  Chariton,  a  county-seat 
town  of  southeast  Iowa.  Senator  Lafe  Young,  publisher  of 
the  Des  Moines  Capital,  has  said  of  him:  "He  is  the  biggest 
man  in  a  small  town  I  have  ever  met." 

Mr.  Larimer  is  the  "father"  of  the  Iowa  State  Clothing 
Dealers'  Association,  probably  the  most  active  State  associa- 
tion of  its  kind  in  the  United  States.  He  delivered  an  address 
in  the  agricultural  division  at  the  Toronto  convention  on  "The 
Analysis  of  a  $50,000  Retail  Clothing  Business  in  a  To^ti  of 
4,000,"  which  attracted  so  much  attention  that  it  was  later 
repeated  by  request  in  the  retail  division. 

What  he  has  done  can  to  a  considerable  extent  be  carried 
out  by  clothiers  in  other  country  towns. 

Mr.  Larimer  has  gone  outside  his  own  county  for  business — 
and  gotten  it. 

Ordinarily,  one  would  suppose  that  his  sales  would  be  limited 
to  people  within  eight  to  ten  miles  of  his  store.  This  is  prob- 
ably the  basis  upon  which  many  manufacturers  operate.  They 
evidently  believe  that  if  they  have  an  agent  in  every  good 
agricultural  town  they  will  get  their  share  of  the  business. 

The  regular  follow-up  system  of  Mr.  Larimer's  store  has  not 
only  all  the  names  of  the  farmers  of  his  county,  but  also  the 
names  of  those  in  the  row  of  townships  in  each  county  which 

^Printers'  Ink,  September  17,  1914,  p.  31. 


80 


PROGRESS  IN  RETAIL  ADVERTISING 


border  on  Mr.  Larimer's  own  county,  in  which  huee  circle 
there  are  more  square  miles  of  territoiy  than  in  LumI  CouTtv 

thetZnof^triltr  Th"  hT.'"  ^/t  County^'a^dTo^ 
f^,  A  u,  ^T  H"-  .^"^  addition  of  these  townships  there- 
in ""t'm^'"  ^7^^*^  li^'V.  ^-'•i-h  i«  divided  .-Sto-iril 
men,        rat  men,        old  men         vniinrr  rvion  '♦  ^*        t  * 

tion  as  regards  children  isX'  car^un"/co"m'^i,ed''"    '"'"'"''- 
Mr.  Larimer  made  a  lone  fight  among  the  busine«  m^n  of 
his  town  to  get  this  trade  started,  but  the  better  roads  th^a?,tn 
mobiles,  parcel  post,  better  values  and  liWal  advSis  Srhat 

T^f"^  r°**"^"   '■"^"'**'  "°t  only  for  Mr.  Larimer   but  for 
all  of  the  business  interests  of  Chariton 

Just  at  the  proper  time,  from  an  agricultural  point  of  view 
and  disregarding  entirely  the  clothing  sea.sons  in  the  cities  Z' 

Does  Mr.  Larimer  know  that  this  pays  him.'    Absolutely 
ev"v  dTi^s?  h'^''  °"  eveo^thing  sold  and  knows  at  the  ^d  of 
TJP     I  ^u^  ^?^  '""•'^  profit  •>«  has  made  from  that  dav's 
sales  and  where  the  profit  came  from.  ^ 

A  hat  manufacturer  recently  co-operated  with  him  in  an  ex 
tensive  hat  display  in  his  windows     A  week  after"he  dlolav 

TsllnTitit^l^J?:'"^'  "^^"'"^  ^  !f««^  ^-"^  the  manufSre^ 
a.sking  If  It  had  been  a  success.      "Which,"  said  Mr   Larimer 

to^v^'^^Vl'^  '^"^  '  ^'^'^\^^  fi"t  P"°«P'e«  of  trade  in  a  sma  i 
d^r-t  ill  r\7^,Wy  "^*'^t«l  «ome  attention,  bu"  I 
didn  t  sell  a  whole  lot  of  goods  while  it  was  in  the  window 

tS^  are  'jiffeL't  '*  W  T''^  ""T  '^""^  ''''^'  ^ut  down  tre 
mings   are   different.     We  have,   however,   since   the  disniav 

felt  an  mcrea^d  demand  for  these  goods  r  gh    afong     ThTtis 

the  difference  between  country-town  and  city  trade.^ The  effect 

forl^velr  ;nfh'^'  T^l?^'^  ^^^^^^^  -"  last  in  cLS 
weeks^    tT;;^  ^  ?l!^\V^.^  ^^^?^  ^.^"^^  ^  «^^^  in  two  or  three 

hav;^n''o?ThJ^i?^  '-^^  ^'-  ^"™^^'  "'"^^t  manufacture,. 
iia\e  not  the  right  \aewpoint  of  small-town   trade       In   the 

cities  the  game  is  to  go  after  the  young  man      AHtln  advert  is 

mg  is  pointed  that  way,  and  if  I  would  follow  fhe  adVi^fJet 

1  would  be  doing  that  here.     I  have  been  told  that  the  vou^- 

fellow  about  town  is  the  liberal  spender  and  thaf  the  flrmef 

only  pvirchases  when  dire  necessitfforces  him  to     This™ 


PROGRESS  IN  RETAIL  ADVERTISING 


81 


true.  The  farmer  wants  high-class  goods;  we  sell  him  just  as 
good  quality  as  do  the  city  stores  to  the  young  men. 

"The  farmer,  furthermore,  is  deeply  interested  in  knowing 
all  about  the  wares  he  buys.  He  has  to  be  a  good  judge  to  be  a 
success  as  a  farmer,  and  he  employs  this  judgment  when  he's 
buying  goods  in  town.  Once  he  finds  an  article  of  true  merit 
he  is  loyal  to  it  and  it  is  hard  to  switch  him  to  another  brand. 
My  success  has  been  made  largely  by  acquainting  the  farmers 
in  my  vicinity  with  the  fact  that  I  have  high-class  goods  and 
then  keeping  up  the  standard. 

"We  have  much  less  transient  trade  than  city  stores.  We 
know  most  of  our  customers  personally.  We  hold  them  by  giv- 
ing them  service  and  we  attract  new  ones  by  intelligent  adver- 
tising." 

Mr.  Larimer's  advertising  bills  have  run  as  high  as  $400  in  a 
single  month,  which  must  1^  considered  a  good  deal  for  a  coun- 
try-town retail  store. 

"The  solution  of  many  of  the  problems  of  the  manufacturer 
and  retailer  will  be  found  when  they  go  direct  as  possible  to  the 
farmer  with  their  advertising,  truthfully  educating  him  in  the 
merits  of  their  products.  The  manufacturer  who  needs  or 
wants  more  business  should  give  this  his  attention,  and  the 
retail  merchant  must  realize  his  mission  is  to  render  service. 

"As  a  retail  merchant,  I  only  ask  that  the  manufacturer  ad- 
vertise his  wares  to  my  customers  to  the  extent  that  they  are 
in  a  receptive  mood;  that  they  know  there  is  a  well-organized 
factory  and  force  that  is  putting  out  a  product  they  are  not 
ashamed  to  have  their  name  connected  with;  that  their  name 
and  mine  offer  a  double  guarantee,  an  additional  safeguard 
that  will  assure  them  full  value  and  entire  satisfaction.** 


CHAPTER  III 


THE  REGULAR  RETAILEH's  FIELD  AND  PROBLEMS 

BEFORE  passing  to  a  consideration  of  the  retailer  as  a 
factor  in  national   advertising  campaigns,   it   may   be 
well  to  look  a  little  more  fully  at  some  of  the  problems 
of  the  retailer  which  grow  out  of  the  nature  of  his  market. 

It  is  coming  to  be  recognized  that  retailing  has  a  social  as  well 
as  a  purely  economic  side.  A  sign  for  window  use  by  retailers 
says:  "If  you  trade  outside  of  our  town  and  I  trade  outside  of 
our  town  and  everj^body  trades  outside  of  our  town,  what 
will  become  of  our  town?"  Back  of  this  question  is  one  of  the 
most  complex  and  serious  of  modem  economic  and  social  prob- 
lems. Local  boards  of  trade  and  chambers  of  commerce  as 
well  as  economists  and  sociologists  recognize  in  this  a  group  of 
problems  worth  thorough  and  careful  study. 

The  larger  types  of  retailer  have  made  at  least  three  positive 
contributions  to  the  merchandise  distributing  process:  (1) 
They  have  given  the  consumer  larger  stocks  from  which  to 
choose.  (2)  They  have,  by  large-scale  buying,  made  possible 
a  reduction  in  price  to  the  consumer  in  some  lines.  (3)  They 
have  introduced  some  methods  of  management  which  cut  down 
wastes  and  increase  the  speed  of  turnover.  There  may  have 
been  other  positive  contributions  in  certain  cases,  and  in  some 
instances  certain  bad  features  have  been  introduced  also,  but 
these  three  are  undeniable  and  no  one  would  be  willing  to  give 
them  up  altogether. 

Changes  of  this  kind,  however,  have  considerably  upset 
the  "regular"  retail  trade.  They  figure  largely  in  the  attempts 
to  get  an  answer  to  the  question:   "What  is  to  become  of  our 

82 


RETAILER'S  FIELD  AND  PROBLEMS 


83 


town?"  No  matter  what  arguments  are  brought  to  bear  in 
favor  of  supporting  the  home  retailer,  or  in  favor  of  abandoning 
him,  the  fact  remains  beyond  dispute  that  what  the  consuming 
public  apparently  wants  and  will  have  is  a  combination  of  the 
good  points  of  both  systems  of  distribution.  The  large  stores 
will  be  forced  to  do  their  work  better,  and  the  small  stores  will 
be  forced  to  compete  more  skilfully  each  year. 

This  constant  betterment  is  working  out  even  now.  It  is 
not  a  deliberately  planned  process,  but  there  is  abundant  evi- 
dence that  it  is  going  on.  Large  stores,  chain  stores,  etc.,  have 
come  to  stay  permanently  in  one  form  or  another,  but  they  will 
be  forced  to  improve  constantly.  On  the  other  hand,  the  smaller, 
"regular"  retailer  and  the  distribution  organization  back  of 
him  are  not  in  process  of  annihilation.  They  are  merely  learning 
how  to  do  their  work  better.  This  process  of  readjustment  is 
sometimes  gloomy,  but  it  is  by  no  means  hopeless. 

And  in  this  process  of  readjustment  advertising  is  beginning  to 
take  its  part.  Local  advertising  by  the  "regular"  retailer  has 
been  shown  to  be  no  longer  mere  announcing.  It  is  one  of  the  most 
effectual  of  modern  means  for  winning  and  holding  confidence 
and  friendship.  With  these  the  retailer's  fight  for  life  is  won, 
and  to  get  them  at  all,  this  appeal  to  the  consuming  public  calls 
for  the  homely  virtues  of  truth  and  service.  National  advertising 
also  is  taking  its  place  as  a  means  for  equalizing  competitive 
conditions  between  the  large  and  small  retailer.  In  many  lines 
of  goods  it  is  bringing  to  the  consumers  in  every  section  the 
advantages  of  the  consumers  in  the  most  advanced  sections, 
and  at  a  lower  price  than  ever  has  been  possible  in  any  other 
way. 

There  are  two  methods  of  attack  upon  the  regular  retailer's 
problem  outside  of  the  direct  use  of  advertising  which  deserve 
particular  mention  here.  We  have  shown  how  advertising 
may,  and  does,  figure  directly  in  many  betterment  plans,  and 
in  even  those  which  at  first  glance  seem  remote  from  it  adver- 
tising often  has  a  conspicuous  part.    The  two  methods  chosen  for 


84  RETAILER'S  FIELD  AND  PROBLEMS 

discussion  here  are:  (1)  The  study  of  the  small  town  and  its  needs 
in  a  search  for  principles,  and  (2)  The  application  of  modem 
methods  of  management  to  the  organization  and  operation  of  the 
smaller  type  of  store. 

(1)   THE  SMALL-TOWN  PROBLEM 

About  53.7  per  cent,  of  the  population  of  the  United  States 
in  1910  lived  outside  of  cities,  towns,  or  other  incorporated 
places  of  2,500  population  or  over.  This  is  the  fact  which 
gives  so  much  importance  to  the  problems  of  the  regular  re- 
tailer. But  the  percentage  of  rural  population  had  declined 
to  this  figure  from  59.5  per  cent,  in  1900.  There  was  an  actual 
increase  in  the  rural  population  of  over  four  million  persons,  but 
the  rapid  growth  was  in  cities.  It  is  this  fact  which  makes  the 
problems  of  the  "regular"  retailer  so  serious. 

To  be  sure,  not  all  of  the  purchases  of  this  rural  part  of  the 
population  are  made  in  country  towns.  But,  on  the  other  hand,  as 
long  as  this  percentage  remains  large  no  form  of  concentrated 
city  retailing  will  meet  the  needs  of  a  manufacturer  who  seeks 
a  national  market  for  his  product.  This  country  market  is  a 
substantial  part  of  the  field  of  the  small  retailer  and  it  will  be 
successfully  occupied  by  him  just  in  proportion  to  the  extent  to 
which  he  applies  modem  methods  in  occupying  it.  These 
methods  include  first  of  all  the  acquiring  by  the  retailer  of  a  firm 
knowledge  of  what  the  elements  of  his  problems  are. 

J.  B.  Powell,  Instructor  in  Advertising  in  the  University  of 
Missouri,  has  given  some  attention  to  this  phase  of  national 
advertising  and  writes  as  follows  concerning  it: 

♦Manufacturers  with  a  national  distribution  are  looking  seri- 
ously mto  the  matter  of  the  decline  of  hundreds  of  country 
towns  and  the  merchants  of  country  towns. 

Let's  tell  the  worst  side  of  the  situation  first,  and  then  turn 
to  the  many  constructive  things  that  are  being  done  to  get  out 
of  the  rut. 

*Advertmng  and  Selling,  June,  1915,  p.  56. 


RETAILER'S  FIELD  AND  PROBLEMS 


85 


J.  R.  Moorehead,  formerly  secretary  of  the  National  Federa- 
tion of  Retail  Merchants  and  now  secretary  of  the  Southwestern 
Lumber  Dealers'  Association,  compiled  figures  from  the  1910 
census  showing  the  decline  in  population  of  small  towns  in 
the  Central  West  that  are  of  vital  interest  to  national  adver- 
tisers as  well  as  small-town  merchants. 

He  showed  that  nearly  6,000  towns  in  seven  Middle  Western 
States  lost  in  population  as  follows: 

Wisconsin,  346;  Missouri,  540;  Iowa,  564;  Indiana,  639; 
Michigan,  677;  Illinois,  788;  Ohio,  1,136.  Out  of  777  county- 
seat  towns  in  these  States,  217,  or  nearly  28  per  cent.,  lost  in 
population,  notwithstanding  the  fact  that  the  county  seat  is 
in  many  ways  the  centre  of  most  of  the  activities  of  the  county 
unit  along  the  line  of  politics,  courts,  the  collection  of  taxes,  and 
other  county  functions. 

There  has  been  a  lot  of  oratory  on  the  causes  for  this  decline 
of  the  picturesque  country  town  and  the  country-town  store 
that  handles  everything  from  dried  herring,  prunes,  and  calicoes 
to  reapers,  mowers,  and  patent  medicines.  Some  lay  it  to  the 
automobile,  that  enables  a  desirable  class  of  customers  to  trade 
at  distant  and  more  attractive  markets.  Others  lay  it  to  the 
better  country  roads,  that  help  the  automobile.  A  Chautauqua 
speaker  last  summer  told  small-town  audiences  in  Iowa,  Mis- 
souri, Kansas,  Nebraska,  and  Oklahoma  that  the  mail-order 
man  was  the  bogey  gentleman  who  was  killing  off  the  country 
towns,  and  that  once  he  got  the  farmer  in  his  clutches  he  stopped 
nothing  short  of  taking  the  farmer's  shirt,  his  family,  and  the 
old  home  farm.  Still  others  lay  the  decline  to  the  coming  of  the 
rural  route  that  killed  off  thousands  of  country  post  offices  that 
operated  profitable  country  stores  as  side-lines.  Country  mer- 
chants all  over  the  land  fought  the  parcels  post  as  the  latest 
weapon  of  the  city  merchant  and  especially  the  mail-order  mer- 
chant aimed  at  their  destruction.  Country  merchant  influ- 
ence forced  the  zone  system  of  parcels  post  distribution,  and 
now  the  mail-order  merchant  cashes  in  on  the  zone  system  by 
shipping  his  merchandise  and  catalogues  by  freight  to  various 
distributing  points  and  then  using  the  parcels  post. 

We  must  first  get  it  out  of  our  minds  that  the  farmer  is  going 
back.  An  investigation  of  country  towns  along  the  Rock  Island 
Railroad  showed  that  70  per  cent,  of  all  the  bank  deposits  were  by 
farmers,  and  that  out  of  an  average  of  eleven  directors  per  bank, 
from  three  to  nine  were  retired  farmers.     In  Kansas  one  farmer 


1 


86 


RETAILER'S  FIELD  AND  PROBLEMS 


RETAILER'S  FIELD  AND  PROBLEMS 


87 


if 

II 


out  of  every  five  owns  an  automobile.  In  Missouri  the  ratio  is  a 
little  better  than  one  car  to  every  twenty  farmers.  A  visitor 
at  a  Michigan  county  fair  in  September,  1914,  counted  more  than 
2,300  automobiles.  At  the  University  of  Missouri  more  than 
2,000  students  out  of  a  total  enrollment  of  3,500  listed  their 
fathers  as  farmers  and  retired  farmers.  A  glance  at  the  mem- 
bership of  any  of  our  State  legislatures  will  show  a  good  big 
proportion  of  the  membership  is  made  up  of  farmers  and  re- 
tired farmers. 

No,  the  farmer  is  not  going  back.    He  is  going  ahead.     He  is 

becoming  a  better  business  man  and  is  buying  better  things 

and  living  better  every  year.     Investigators  for  the 

^^'^^^^    United  States  Government  have  recently  reported  a 

Going  Back  steady  increase  in  the  tendency  of  farmers  to  form 

co-operative  buying  units.     The  co-operative  selling 

idea  has  been  a  success  for  some  time. 

What  have  the  average  country-town  merchants  been  doing 
in  the  midst  of  all  this  general  prosperity  in  their  trade  terri- 
tories.? They  have  been  doing  just  what  a  majority  of  the 
country  preachers  and  a  majority  of  the  country  editors  have 
been  doing.  They  have  been  exerting  themselves  just  enough 
to  get  by  with  the  least  possible  effort  and  thought  and  prac- 
tically no  service. 

The  main  cause  for  the  decline  of  country  towns  and  country- 
toT^^,  merchants  lies  in  the  general  lack  of  efficiency  and  modem 
business  judgment  on  the  part  of  the  country  merchants  them- 
selves. In  brief,  the  average  country  merchant  spends  too 
much  time  in  damning  the  "interests**  that  he  thinks  are  forcing 
him  out.  He  spends  too  much  time  in  trying  to  keep  his  compet- 
itors from  getting  ahead,  instead  of  studying  his  own  problems 
and  trying  to  get  ahead  himself. 

Fortunately  there  is  a  dawn  of  light  in  all  this  general  deso- 
lation of  country  towns.  In  many  towns,  through  the  organiza- 
tion of  retail  merchants*  associations,  commercial  clubs,  and  ad 
clubs,  the  towns  are  awakening  to  their  problems.  When  this 
happens  the  town  takes  on  a  new  lease  of  life  and  goes  ahead 
instead  of  the  reverse.  Through  the  study  of  credits  the  coun- 
try-town merchant  is  finding  that  the  desirable  cash  trade  of 
his  community  is  going  to  larger  trading  centres  through  the 
medium  of  mail-order  buying,  while  he  is  left  to  deal  with  the 
cheaper,  poor-pay  customers. 

In  opposition  to  this  tendency  to  trade  away  there  has  started 


the  "Trenton  (Mo.)  Idea,**  the"  Franklin  Co.  (Kan.)  Associa- 
tion.'* the  "Hampton  Plan,*'  the  Neosho  (Mo.)  Ad  Club  Plan, 
and  a  number  of  other  movements.  Many  towns  are 
Wkai  Som/f  copying  wholly  or  in  part  these  schemes.  The  first  two 
AreD^nq  ^^^  similar  in  that  they  are  based  upon  a  closer  union 
between  the  merchant  and  farmer,  the  local  organiza- 
tions being  composed  of  both  for  the  common  development  of  the 
community.  The  "Hampton  Plan'*  includes  this  feature  and  in 
addition  the  idea  of  coupling  up  with  national  advertising,  by  the 
local  merchants,  as  a  way  of  boosting  the  prestige  of  the  town 
as  a  retail  centre  by  showing  that  the  stores  have  in  them  goods 
of  national  fame  at  prices  as  low  as  can  be  secured  elsewhere. 

These  small  towns  have  a  new  type  of  commercial  secretary 
who  is  rapidly  developing  into  a  town  business  manager.  He 
maintains  in  his  office  the  leading  books  and  periodicals  on  ad- 
vertising, business  promotion,  foreign  trade  extension,  credits, 
store  efficiency,  window  trimming,  and  so  on.  He  advises  mer- 
chants on  their  advertising  copy.  He  inaugurates  trade  exten- 
sion movements.  He  plans  celebrations,  com  shows,  municipal 
Christmas  trees,  downtown  lighting  systems.  He  sometimes 
has  a  vigilance  committee  that  keeps  the  fly-by-night  fire-sale 
fiends  away,  and  discourages  misleading  advertising.  He 
has  a  filing  cabinet  that  contains  the  thumb-prints  of  all  the 
professional  dead  beats  of  his  town  and  other  towns. 

This  type  of  town  has  taken  the  farmers  into  partnership 
with  the  business  man.  The  farmer  has  learned  that  the  proxim- 
ity of  a  good  town  with  a  market  for  his  products  means  an 
increased  valuation  for  his  farm.  This  tyjje  of  town  and  this 
type  of  rural  community  will  forge  ahead  because  it  is  based 
on  that  old  word  with  a  modern  meaning — service. 

The  national  advertiser  will  find  all  these  towns  responsive 
to  his  dealer  work  and  excellent  places  to  establish  a  second  line 
of  defence  against  the  encroachment  of  chain  stores,  private 
brands,  and  other  forms  of  opposition  to  his  methods. 

The  Hampton  plan  referred  to  in  Mr.  PowelFs  article  has 
created  a  good  deal  of  comment.  It  is  described  in  somewhat 
more  detail  in  the  following  article: 

*Westfield,  Mass.,  and  other  small  towns  which  have  made 
themselves  famous  are  going  to  have  a  close  rival  in  Hamp- 

*  Printers  Ink,  February  11.  1915,  p.  55. 


RETAILER'S  FIELD  AND  PROBLEMS 


RETAILER'S  FIELD  AND  PROBLEMS 


89 


ton,  la.  The  merchants  of  that  town  have  seen  a  great 
light.  They  are  going  to  start  a  campaign  of  coupling  up  with 
national  advertising,  using  the  means  they  have  at  hand,  their 
local  papers,  their  windows,  the  United  States  mail,  etc.,  in 
an  effort  to  show  that  their  stores  have  in  them  the  best-known 
goods  in  America.  They  are  going  to  demonstrate  that  they 
are  entitled  to  all  the  patronage  of  buyers  of  their  neighbor- 
hood, to  draw  new  buyers  from  a  distance,  and  to  "cash  in'* 
on  general  publicity.  If  the  idea  proves  "a  go"  in  this  typical 
farming  centre,  the  farm-paper  publishers  will  extend  the  cam- 
paign throughout  the  country.  In  other  words,  Hampton  is 
to  be  made  a  sort  of  laboratory  test. 

At  a  meeting  of  the  Commercial  Association  of  Hampton, 
President  E.  P.  Andrews  related  how  he  and  others  had  become 
interested  in  a  plan  suggested  by  the  trades  relationship  com- 
mittee of  the  Agricultural  Publishers'  Association. 

H.  G.  Larimer,  of  Chariton,  la.,  whose  success  in  coupling 
up  with  national  advertising  has  already  been  described  at 
length  in  Printers^  Inky  told  how  he  had  built  up  a  retail  business 
in  his  town  of  $60,000  by  pushing  advertised  goods. 

"During  last  November,"  he  said,  "there  were  many  days 
when  more  than  50  per  cent,  of  my  sales  were  with  farmers  who 
lived  outside  my  county.  The  same  thing  can  be  done  in 
Hampton. 

"Each  merchant  carries  certam  lines  of  nationally  advertised 
goods.  Get  in  touch  with  your  manufacturers;  tell  them  what 
you  want  to  do.  And  don't  forget  that  one  of  the  most  essen- 
tial things  in  advertising  is  timeliness — it  would  not  pay,  for 
example,  to  advertise  B.  V.  D.  underwear  in  February.  This 
campaign  will  be  huilt  on  timeliness.  Find  out  from  the  manu- 
facturers when  various  lines  are  to  be  advertised  heaviest. 
Then  couple  up  with  their  advertising  campaign.  Insist  upon 
wholesalers  and  manufacturers  furnishing  all  kinds  of  dealers* 
helps,  inserts,  circulars,  etc.,  to  mail  out  to  the  trade. 
CtUtwaiing  "Did  you  ever  see  one  of  these  old  *  crabs'  who  look 
Affability  as  though  they  never  smiled  in  their  life?  Watch 
as  an  Aid  them  when  they  run  for  office.  They  are  affable, 
to  SaUf-  pleasant,  and  can  get  out  and  fraternize  with  every- 
manship  y^^  Practise  along  this  line.  Put  it  on  a  little 
stronger.  A  colored  woman  once  told  me,  *I  like  to  trade  in 
your  store.'  I  said,  *I  am  glad  you  like  to  trade  here,  but  why 
should  you  like  to  come  here  rather  than  elsewhere?'    She  re- 


plied, 'This  is  one  place  I  am  treated  as  a  lady,  whether  I  am 
one  or  not.'  Everybody  likes  a  slap  on  the  back.  Don't  be 
afraid  to  tell  Jones,  who  has  been  trading  at  your  store  a  long 
time,  that  you  appreciate  his  business.  Act  as  if  you  really  ap- 
preciate his  help." 

James  M.  Irvine,  of  the  Curtis  Publishing  Company;  E.  W. 
Rankin,  representing  the  Capper  farm  papers;  Arthur  Haubold, 
of  the  National  Farm  Power  Papers,  and  S.  R.  McKelvie,  pub- 
lisher of  the  Nebraska  Farmer,  spoke  in  support  of  the  plan. 

C.  F.  Roemer,  of  Hampton,  president  of  the  Iowa  Retail 
Dealers'  Association,  said: 

"There  is  good  for  Hampton  in  most  advertising.  I,  as  a 
general  implement  dealer,  have  been  selling,  among  other  goods, 
one  article  for  seventeen  years.  That  article  is  advertised  in 
farm  papers.  It  is  the  De  Laval  Cream  Separator.  Seventeen 
years  ago  a  350-pound  separator  sold  for  $125.  This  machine 
has  been  nationally  advertised  and  I  have  advertised  it  locally 
to  couple  up  with  that  of  the  manufacturer's  advertising  and 
get  the  benefit.  To-day  their  900-pound  machine  sells  for  $110. 
The  350-pound  machine  sells  at  $70.  This  bears  out  the  state- 
ment that  the  cost  of  advertising  is  not  added  to  the  cost  of  the 
goods." 

Cards  were  distributed  reading  as  follows: 

BUY  IT  IN  HAMPTON 

Because  Here  Are  Pound  America's  Best  Known  Goods — Those  That 

Have  The  Triple  Guarantee 

(1) 
Guaranteed  by  Our  Own  Reliable  Merchants 

(«) 
Guaranteed  by  the  Leading  Manufacturers  of  the  United  States 

(3) 
Guaranteed  by  the  Foremost  Farm  Papers  and  Magazines 

BUY  IT  IN  HAMPTON 

The  meeting  at  once  raised  a  fund  to  engage  a  manager  for 
the  "Buy  It  in  Hampton"  campaign,  and  started  work.  It 
has  already  attracted  attention  among  national  advertisers, 
who  see  in  it  an  opportunity  to  make  their  advertising  much 
more  effective,  and  perceive  the  fact  that  the  small-town  mer- 


90 


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01 


• 

i 


chant  often  carries  more  nationally  advertised  lines  of  goods 
than  those  of  the  larger  cities. 

The  Agricultural  PubUshers'  Association  plans,  after  Hamp- 
ton has  succeeded  in  the  work,  to  spread  the  idea  by  the  use  of 
trade  papers  and  convention  work. 

One  development  which  promises  to  take  on  great  importance 
in  the  next  few  years  is  the  development  of  analytical  methods 
and  their  application  to  selUng  problems.  In  the  case  of  the 
small-town  problem  it  is  comparatively  easy  to  make  use  of 
data  already  available,  and  it  will  not  be  long  before  advertisers 
will  have  as  much  of  such  material  as  they  need  for  a  really 
careful  study  of  the  retail-town  problem.  W.  H.  Bridgman, 
at  a  recent  meeting  of  the  Wisconsin  Farmers'  Course  and  Coun- 
try Life  Conference,  gave  the  following  summary  of  the  business 
conditions  of  Stanley,  Wis.,  which  indicates  something  of  the 
simplicity  and  definiteness  of  this  phase  of  the  market-analysii 
problem : 

*The  subject  of  this  paper  is  a  typical  American  small  city 
whose  population  in  1900,  according  to  the  United  States  cen- 
sus, was  2,387.  In  1910  it  was  2,675.  Apparently  it  is  en- 
joying an  increase  now  in  a  ratio  equal  to  that  which  prevailed 
during  the  ten  years  which  elapsed  between  1900  and  1910, 
It  was  originally  a  sawmill  settlement  in  the  woods,  its  loca- 
tion  being  determined  by  the  proximity  of  much  merchantable 
pine  and  other  timber.  The  first  settlers  brought  hither  to  the 
number  of  300  or  400  to  man  this  single  industry  were  Scandi-^ 
navian  in  nationality.  They  left  the  impress  of  their  charactei 
on  the  town  for  all  time. 

These  people  are  extremely  conservative  in  their  businesi 
habits  and  inclinations  as  related  to  their  personal  affairs  and 
as  related  to  public  affairs.  They  never  loaned  themselves 
to  the  plans  of  the  town  boomer  and  real  estate  speculator. 
They  always  cast  their  votes  agamst  bond  issues  in  any  con- 
siderable amount,  and  the  city  indebtedness,  except  for  a  few 
short-time  loans  for  school  buildings,  has  always  been  practically 
nil. 

*Adverimng  and  Selling,  September,  1»U,  p,  78. 


Notwithstanding  this  the  city  has  to-day  $100,000  invested 
in  school  buildings  and  equipment,  nearly  a  mile  of  brick  and 
cement  paved  streets,  a  fine  sewer  and  water  system,  a  brick 
city  hall,  and  well-lighted  streets,  and  the  people  are  grateful 
to  those  who,  during  the  first  thirty  years  of  the  city's  life, 
have  seen  fit  to  steer  clear  of  the  shoals  of  debt. 

The  schools  cost  twenty  thousand  dollars  a  year,  with  courses 
in  domestic  science  and  manual  training.  The  assessed  valu- 
ation is  one  and  a  half  millions  and  the  tax  rate  2j  per  cent. 
Six  hundred  and  fifty  children  attend  the  public  schools.  The 
high  school  has  approximately  one  hundred  and  fifty  students, 
half  of  whom  are  from  the  neighboring  farms. 

I  deemed  the  above  preliminary  statement  essential  to  an 
intelligent  analysis  of  the  business  of  the  town.  In  keeping  with 
the  usual  coiu*se,  as  the  timber  areas  receded  the  farms  have  takeii 
their  place,  and  while  the  lumber  manufacturing  industry  is 
still  the  important  industry  of  the  city,  the  logs  are  brought  from 
a'considerable  distance  by  rail,  and  on  three  sides  of  the  city  for  a 
distance  of  ten  miles  the  improved  farms  occupy  practically 
the  entire  area,  but  with  a  population  much  less  dense  than  is 
found  in  similar  areas  of  older  settled  farming  communities. 
I  have  been  unable  to  estimate  the  density  of  this  population 
with  any  considerable  degree  of  accuracy,  but  I  have  taken  the 
delivery  of  the  Stanley  post  office  as  the  basis  on  which  to  esti- 
mate the  population  tributary  to  the  city  in  a  business  way.  I 
find  that  mail  is  dehvered  to  1,200  resident  families  in  the  city 
and  surrounding  country,  indicating  a  population  of  at  least 
6,000,  more  than  half  of  which  is  from  the  farms.  I  find  that 
five  hundred  families  of  these  farmers  are  supplied  from  the  post 
office  by  carrier. 

The  trade  of  these  people  is  with  Stanley  merchants  or  dealers 
in  all  the  following  lines:  General  merchandise,  including  gro- 
ceries, meats,  and  provisions,  feed  stuffs,  drygoods. 
Anwunta    clothing,  shoes,  hardware,  lumber,  brick,  lime,  cement. 

Spent      implements,  and  vehicles,  approximately  $600,000  dur- 
Different    ^^S  ^^  year  1913,  or  approximately  an  average  of 

Lines  $500  to  each  family  in  Stanley  and  the  Stanley 
country.  To  pursue  the  analysis,  hardware  sales 
amounted  to  $80,000;  groceries,  $150,000;  shoes,  $80,000;  cloth- 
ing and  drygoods,  $210,000;  lumber,  $50,000;  brick,  $3,500; 
implements  and  vehicles,  $75,000;  feed  stuffs,  $52,000;  jewelry, 
$12,000;   drugs,  $20,000,  and  furniture,  $20,000.     This  trade 


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93 


was  about  equally  divided  between  the  farm  and  the  city 
homes,  with  the  exception  of  the  following  lines:  vehicles  and 
implements  practically  all  with  the  farmer.  Furniture,  25 
per  cent,  with  the  farmer;  meats,  only  10  per  cent,  with  the 
farmer;  jewelry,  only  10  per  cent,  with  the  farmer.  I  find 
that  75  per  cent,  of  the  farm  business  is  cash  business,  while  only 
about  60  per  cent,  of  the  city  trade  is  cash  business. 

The  dealers  in  general  merchandise  and  regular  dealers  in 
grains  and  feeds  bought  from  the  farmers  $100,000  worth  of  prod- 
uce, such  as  grams,  poultry,  butter  and  eggs.     This 

Sales  of    ^i^^g  jjq|.  include  live  stock.     In  addition  to  this  the 

farmers  ^ocn\  creamery  bought  cream  for  $100,000.  The  pea 
cannery  paid  $30,000  for  i>eas.  The  potato  dealers  paid 
$30,000  for  potatoes,  and  a  salting  station  paid  $12,000  for  cucum- 
bers. A  rough  estimate  of  live  stock  purchased  by  dealers  is 
$150,000,  and  the  farmers  probably  sold  $10,000  worth  of  wood  to 
customers  in  the  city.  This  totals  $432,000.  In  this  connection 
the  cheese  factories,  many  of  which  are  located  in  territory  tribu- 
tary to  Stanley  but  outside  the  city,  should  be  taken  into  account 
as  perhaps  the  farmer's  most  important  source  of  revenue. 

The  total  bank  deposits  in  the  two  banks  of  the  city  are 
$430,000,  $250,000  of  which  is  farmers'  deposits.  The  loans 
of  the  two  banks  are  about  $420,000,  and  the  farmer  loans  al- 
most exactly  equal  their  deposits. 

The  so-called  mail-order  business  is  an  important  factor  in 
the  relations  of  this  city  as  of  many  others  with  its  tributary 
population.  The  amount  of  this  business  is  diflScult  to  esti- 
mate with  any  degree  of  accuracy,  but  I  found  records  of  busi- 
ness with  Chicago  mail-order  houses  by  the  farming  people 
amounting  to  $25,000.  I  am  positive  that  I  do  not  exaggerate 
in  estimating  the  amount  of  retail  trade  which  is  lost  by  the 
tradesman  of  Stanley  to  the  mail-order  houses  and  large  stores  at 
$100,000,and  the  amount  should  be  about  equally  divided  between 
the  city  and  farm  populations,  which  is  a  fair  proportion. 

Such  institutions  as  the  creamery,  the  cannery,  the  cucumber 
salting  station,  and  potato  warehouses  bring  many  farmers  to  the 
city  regularly  at  certain  seasons  and  make  it  convenient  for 
them  to  do  their  banking  here  and  naturally  benefits  trade. 
One  certain  nationality  has  found  cucumber  culture  much  to 
its  liking,  the  work  being  done  by  women  and  children  on  small 
clearings  on  farms  of  small  acreage.  The  men  of  these  families 
work  at  the  mills  and  leave  the  women  to  do  the  farming. 


Another  nationality  finds  dairying  much  to  its  liking  and  spe- 
cializes in  butter  fat  production,  both  for  butter  and  cheese. 
People  of  different  nationalities  are  wont  to  colonize  to  some 
extent,  and  a  certain  industry  frequently  finds  favor  with  a  cer- 
tain nationality  of  immigrants. 

The  Scandinavian  people  who  populated  the  city,  being  bom 
and  bred  lumbermen,  do  not  become  farmers  to  any  great  ex- 
tent, but  move  on  westward  as  the  centre  of  the  lumber  in- 
dustry moves. 

My  observation  is  that  the  most  important  factors  in  the  re- 
lations of  the  city  people  with  those  of  the  surrounding  country 
are  the  schools  and  the  churches.  Many  of  the  high  school 
students  from  the  farms  spend  their  nights  at  home,  while 
those  who  board  occasion  two  trips  to  the  city  by  the  home  folks 
during  the  week,  who  bring  them  to  the  city  on  Monday  and 
come  after  them  on  Friday. 

Practically  all  of  the  church  aflSliations  of  the  6,000  or  7,000 
people  of  Stanley  and  the  Stanley  country,  with  the  exception 
of  a  possible  500,  are  with  church  organizations  in  the  city  of 
Stanley. 

The  place  of  national  advertising  in  this  problem  of  the 
"regular"  retailer's  knowledge  of  his  market  is  brought  out 
in  an  article  on  the  general  store  by  Frank  Farrington,  editor 
of  the  Inland  Storekeeper ^  who  has  a  wide  reputation  as  an  alert 
student  of  the  small  retailer's  problems.     In  this  article  he  says : 

*The  proprietor  of  the  village  general  store  knows  little  and 
cares  less  about  chain  stores  and  their  ravages  among  the  small 
individual  dealers.  He  is  not  worrying  about  whether  he  shall 
sell  advertised  goods  or  not.  The  high  cost  of  living  is  to  him 
largely  a  subject  for  the  attention  of  newspaper  and  magazine 
writers,  turnover  means  a  kind  of  cake,  and  the  war  is  a  his- 
torical event  a  long  way  off. 

All  of  which  is  merely  another  way  of  saying  that  our  small- 
town and  crossroads  general  merchants  are  sawing  wood  and 
saying  very  Uttle. 

When  I  say  general  store,  meaning  it  in  the  common  sense, 
I  do  not  refer  to  commissary  and  company  stores,  such  as 
are  nm  throughout  the  South  and  in  the  lumber  sections  of 

sprinters  Ink,  November  26,  1914,  p.  51 


f 


III 


M  RETAILER'S  FIELD  AND  PROBLEMS 

the  Northwest.  These  stores  sometimes  employ  manager» 
who  have  made  a  considerable  study  of  business  methods  and 
who  occasionally  are  quite  scientific  in  their  work.  I  refer 
rather  to  the  average  storekeeper  in  the  small  community, 
operating  a  store  which  sells  anything  he  thinks  he  can  make  a 
profit  on,  and  who  does  not  hesitate  to  throw  out  that  which 
does  not  pay  at  least  an  apparent  profit. 

Taking  the  census  figures  we  find  reported  the  following  stores 
in  towns  of  5,000  and  less  serving  53,639,074  of  our  population: 

General  stores 1^1  ^g^ 

Groceries 33*131 

^jygoods '•'•''.''.''.'.'.''.:'.'.::::'.:'.:    s^ss 

oboes Q  no  t 

%^  0,\J>jO 

P/"^  V    ■  •  V- «5,870 

Men  s  fumisnmgs I  47  j 

Clothing o'oofi 

Hard-are :...:; ::.::.-::    «?;h3 

J^-^le"   12  4g3 

Tottti 256,77» 

In  the  aggregate  these  handle  a  tremendous  amount  of  goods. 
With  an  average  annual  trade  of  $5,000,  they  will  sell  mer- 
chandise each  year  up  to  the  gross  amount  of  $1,283,895,000! 

There  is  a  business  worth  going  after,  and  it  is  all  provided 
with  credit  faciHties,  and,  what  is  more,  with  the  money  to  pay 
its  bills.  South  America  may  have  a  business  of  twice  as  much 
waiting  for  us,  but  it  hasn*t  the  money  now.  Here  are  256,779 
merchants  who  sell  from  $1,000  a  year  up  to  $100,000  a  year  or 
more,  and  they  have  the  money.  If  there  is  any  money  in  circu- 
lation anywhere  it  is  in  the  small  towns. 

The  farmers  have  plenty  of  everything  to  sell.  They  are  the 
customers  of  the  general  stores;  they  and  the  village  business 
men,  who,  in  turn,  get  their  money  from  the  farmers. 

The  war  has  not  interfered  with  the  business  of  these  mer- 
chants, except  to  the  extent  of  inconveniencing  them  a  little 
about  getting  just  exactly  the  goods  they  have  ordered. 

fectedbu    ^  P^^^^  ^*^^^  ^^"  ^  ^^"^^  higher,  they  have  merely 
War/    charged  more.     Even  in  to\nis  as  large  as  10,000  in 
Worries     up-state  New  York  business  is  going  on  as  usual.    The 
local  daily  papers  there  play  up  the  war  no  more  than 
any  other  news.     Unless  they  are  sensational,  chey  have  re- 
duced the  ordinary  war  heading  to  single  column.    "We  can't 


RETAILER'S  FIELD  AND  PROBLEMS 


95 


sell  any  of  these  war  weeklies,"  says  the  newsdealer  in  such  a 
town.  The  war  has  not  shaken  the  rural  population  out  of  its 
groove. 

The  farmer  likes  to  sit  back  a  little  while  in  the  evening  and 
read  in  his  newspaper  the  progress  of  the  war,  but  as  for  its 
making  any  difference  in  the  amount  of  business  he  is  giving 
the  local  storekeeper,  it  only  increases  it  by  giving  him  rather 
more  money  to  spend. 

Throughout  the  Middle  W^st  there  are  thousands  of  small 
communities  where  practically  all  the  business  is  handled  by 
general  stores,  which  carry  everything  up  to  the  latest  of  the 
advertised  goods.  These  stores  are  managed  by  men  who  are 
on  the  lookout  for  new  goods,  and  these  stores  are  selling  many 
brands  of  advertised  goods. 

Investigations  have  shown  the  following  goods  to  be  in  active 
demand  in  general  stores: 


Ostermoor  mattre.sseii 

Holeproof  stockings 

Black  Cat  .stockings 

Hart,  Schaffner  &  Marx  clothing 

Queen  Quality  shoes 

Whittemore  shoe  polishes 

Prophylactic  toothbrushes 

Colgate's  dentifrices 

Sanitol  dentifrices 

DeLong  hooks  and  eyes 

Arrow  collars 

Oriental  collars 

Hoosier  kitchen  cabineta 

Jewel  stoves 

Arctic  refrigerators 

Alwin  baby-buggies 

Haywood  baby- buggies 

Ivory  soap 

Gold  dust 

Mellin's  food 

Kellogg's  corn  flakes 

Bissell  carpet  sweepers 

Gold  Medal  flour 

Royal  baking  powder 

Knox  gelatine 

Remington  tjijewriters 

Oliver  typewriters 

Winchester  arms 

S.  &  W.  arms 

Colgate's  perfumes 

Gage  bats 


Porosknit  underwear 

Munsingwear 

Walk-over  shoes 

Douglas  shoes 

President  su.spenders 

Boston  garters 

Velvet  Grip 

Gillette  razors 

Omo  dress  shields 

Kleinert  dress  shields 

Warner's  corsets 

American  Lady  corsets 

White  Mountain  refrigerators 

Toledo  steam  cookers 

Universal  food  choppers 

Enterprise  food  choppers 

Elgin  watches 

IngersoU  watches 

Baker's  cocoa 

Karo  com  syrup 

Post  toasties 

Liquid  veneer 

Uneeda  biscuit 

Kingsford's  starch 

Rogers'  silverware 

Clipper  lawn  mowers 

Ferry's  seeds 

Burpee's  seeds 

Mennen's  talcum 

Old  Trusty  incubators 

Kodaks 


f 


r 


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97 


J 


Ford  automobiles 

Campbell's  soups 

Van  Gimp's  pork  and  beans 

Mason  fruit  jars 

Richardson's  silk 

Corticelli  silk 

Estey  organs 

Edison  talking  machines 


Annour*8  beef  extract 
Durkee's  salad  dressing 
Heinz's  products 
Macbeth  lamp  chimneys 
Diamond  dyes 
Fleischer's  yam 
Seth  Thomas  clocks 
Victrolas 


This  list  does  not  pretend  to  be  complete,  and  might  easily 
be  doubled  m  length  to-day. 

In  the  East  the  average  volume  of  small-community  busi- 
ness is  smaller  than  in  the  Middle  West,  but  in  a  Httle  village 
200  Tons  ^l  ^  ^"P^^  ^^  hundred  people  in  the  Catskills  there  are 
of  Mer-    ^^F,^^  Storekeepers  hauling  in  their  goods  about  nine 
ckandise    miles  by  team,  and  the  smallest  of  the  three  paid 
freight  and  teaming  charges  the  past  year  on  200  tons  of 
merchandise  sold  over  the  counter.    The  two  others  handled 
anaounts  largely  in  advance  of  that.     This  in  addition  to  such 
bulky  stock  as  dau-y  feeds  and  grain,  of  which  some  350  car- 
loads went  into  the  town  to  be  sold  through  three  dealers.    And 
this  community  is  not  a  rare  exception. 

One  product  of  the  section  mentioned  is  creamery  butter. 
One  creamery  in  a  recent  year  bought  some  seven  million 

?x?uM^^  ^^  ??*^^'  ^^^  ^^^^^  ^^  P^^^  ^^^  farmers  cash  monthly. 
While  the  Eastern  farmers  are  not  getting  grain  money  like 
those  of  the  West,  they  are  getting  its  equivalent  in  other  forms, 
as  above. 

To-day  the  farmers  of  the  East  are  getting  28  cents  per  pound 
for  dressed  turkeys,  all  they  can  ship.  Their  hens  cannot  pro- 
duce eggs  fast  enough  to  keep  the  market  price  to  the  farmer 
down  to  40  cents.  Butter  and  milk  are  in  proportion.  If  there 
is  money  anywhere  it  is  in  the  pockets  of  the  customers  of  the 
general  stores.  This  is  not  a  war-time  condition  solely :  it  is  the 
"sual  thing.  There  have  been  hard  years  for  the  farmers,  but 
they  have  been  the  exception,  and  scientific  farming  and  increased 
demands  have  made  such  years  a  thing  scarcely  to  be  feared. 

The  general  storekeeper  in  the  country  does  not  know  much 
about  scientific  management.  He  hasn't  time  for  it,  or  he 
thinks  he  hasn't,  which  amounts  to  the  same  thing.  His  busi- 
ness must  be  large  and  his  goods  must  pay  good  profits,  because 
he  is  wasteful.  His  dead  stock  accumulates  rapidly  and  he 
lacks  the  mitiative  to  get  rid  of  it  as  a  city  merchant  will  and 


must.  He  is  improving  as  a  class  and  adopting  modern  methods, 
but  there  are  still  very  backward  exceptions. 

Within  a  few  miles  of  me  is  a  store  doing  a  business  of  $20,000 
a  year  in  a  general  line.  It  is  managed  in  violation  of  all  the 
rules  for  successful  store  management.  The  proprietors  trust 
every  one  who  wants  to  be  trusted,  and  when  they  cannot  col- 
lect they  take  a  judgment  and  get  something.  They  buy  any- 
thing the  farmer  has  to  sell.  They  sell  him  anything  he  wants 
to  buy,  and  they  cut  prices  on  a  few  things  just  enough  to  en- 
able them  to  say  they  are  selling  cheap.  This  general  store 
needs  modem  methods  and  better  financial  handling.  But  it 
makes  money  as  it  is,  by  sheer  volume  of  business.  It  could 
make  more.  It  might  handle  better  goods  and  handle  them 
better  if  the  manufacturers  would  give  its  proprietor  the  ad- 
vantage of  what  they  know  about  good  storekeeping.  Gen- 
eral storekeepers  are  not  as  keen  as  they  might  be  about  inod- 
ernizing  their  stock  and  methods,  but  they  do  respond  to  right 
missionary  work. 

Some  time  ago  I  told  the  readers  of  Printers'  Ink  that  a  ran- 
dom list  of  country  merchants,  whose  annual  business  was 
known,  averaged  over  $20,000  each,  with  stores  averaging 
2,600  feet  of  floor  space.  It  would  scarcely  be  possible  to  take 
a  list  of  city  dealers  without  making  a  special  selection  for  the 
purpose  and  get  as  good  a  showing. 

If  we  go  to  Dun  or  Bradstreet  and  select  only  the  best-rated 

small-town  merchants  east  of  the  Rockies  and  north  of  the 

Ohio,  we  will  get  about  30,000  of  them.     These  are  men 

Attitude    i^ije  figures  show  to  be  good  business  men  and  five 

^^'^    operators.     Their  business  bulks  large,  but  don't  make 

Agencies  the  mistake,  Mr.  Manufacturer,  of  ignoring  the  country 
merchant  who  is  not  rated  or  who  is  poorly  rated. 
There  is  only  one  way  to  be  sure  the  general  storekeeper  is 
not  doing  enough  business  to  make  him  worth  approaching, 
and  that  is  to  see  his  store  and  talk  with  him.  The  fact  that 
he  does  not  show  up  well  in  the  commercial  agencies'  books 
shows  not  that  he  has  no  business  or  money  or  credit,  but  that 
he  prefers  to  keep  his  affairs  to  himself. 

I  have  been  a  small-town  merchant.  I  have  hundreds  of 
small-town  merchants  whom  I  count  my  friends.  I  know  that 
these  men  do  not  take  kindly,  as  a  rule,  to  the  representative 
of  the  commercial  agency  or  to  the  complicated-looking  blanks 
he  offers  them.    True  enough,  he  approaches  them  politely. 


II 


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RETAILER*S  FIELD  AND  PROBLEMS 


RETAILER'S  FIELD  AND  PROBLEMS 


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i 


^ 


1 1    I 


ij 


and  he  is  perhaps  entitled  to  the  information  he  wants.  He 
says  he  only  wants  to  know  a  few  of  the  main  facts,  but  when 
you  have  filled  in  the  whole  of  one  of  his  blanks,  you  have  given 
the  story  of  your  financial  life.  The  country  merchant  will 
not  do  it.  He  can  buy  all  the  goods  he  wants.  His  jobbers 
trust  him.  If  the  manufacturer  doesn't  want  to  trust  him,  he 
needn't  do  so.     He  should  worry;  that  is  his  attitude. 

To  the  question,  "Do  you  give  the  commercial  agencies  a  re- 
port?" I  have  heard  merchants  here,  there,  and  all  over  reply, 
"No.  It's  none  of  their  business  how  much  I  owe  or  how  much 
I've  got  in  my  wife's  name.     I  can  buy  all  the  goods  I  want." 

Of  course,  the  attitude  is  wrong.  It  is  not  the  whole  of  busi- 
ness prestige  to  be  able  to  buy  all  the  goods  you  want,  but  we  are 
looking  for  facts.  The  facts  are  that  the  manufacturer  is  watch- 
ing the  man  of  South  America  form  in  the  smoke  of  his  35-cent 
panetela,  forgetting  that  the  map  of  the  United  States,  showing 
the  smallest  post  offices,  is  hanging  on  the  wall  right  back  of  him. 

Let  any  manufacturer  take  a  map  that  shows  all  the  post 
offices  of  any  section  and  spot  with  red  the  communities  where 
he  Icnows  his  goods  are  sold.  The  freckles  will  be  as  far  apart 
as  the  buttons  on  a  two-button  Balmacaan.  "I  can't  send  my 
moil  into  those  little  villages,"  says  the  manufacturer.  "It 
takes  too  long  to  get  in  and  get  out  again."  Perhaps  this  is  so. 
But  there  is  a  great  volume  of  business  filtering  through  these 
villages  and  somebody  thinks  enough  of  it  to  go  alter  it. 

The  jobber's  man  gets  there  and  perhaps  he  takes  your  line 

and  perhaps  he  does  not.    You  and  I  know,  and  so  does  the 

The  Jobber  storekeeper  know,  that  if  the  jobber's  salesman  has 

and  Uis     any  private-brand  stuff  that  competes  with  your  ad- 

I^ivau     vertised  line,  the  private  brand  is  the  one  that  comes 

Brand  jjj  jjj  ^^^  Yots,  while  the  advertised  kind  comes  only 
when  it  must. 

The  general  storekeeper  is  more  independent  in  marking  his 
goods  than  the  city  merchant.  The  latter  marks  them  as  he 
must  to  meet  the  competition  around  him.  He  does  not  have 
the  privilege  of  selling  at  such  a  rate  as  he  thinks  will  pay  him 
a  pro[>er  profit.  The  general  storekeeper  can  mark  the  25-^ 
cent  size  of  a  proprietary'  medicine  up  to  80  cents  if  he  likes,  * 
and  get  by  with  it,  too.  He  does  not  figure  up  how  much  it 
costs  him  to  do  business  and  say  to  himself,  "This  package 
costs  me  sixteen  and  two  thirds  cents.  My  percentage  ex- 
pense of  doing  business  is  18  per  cent,  on  the  scUing  price,  which 


is  22  per  cent,  on  the  cost  price,  so  I  must  get  22  per  cent,  of 
16f,  which  is.  .  .  .  "  Not  on  your  life.  He  says,  "Two 
doUars  a  dozen.    That  sells  for  a  quarter." 

Does  the  mail-order  house  sell  the  same  thing  for  19  cents,  or 
does  the  nearest  large  town  cut  the  price  about  the  same  amount, 
Mr.  General  Storekeeper  goes  peacefully  along  his  way  with  his 
profit-paying  price  just  the  same,  unless  enough  of  his  customers 
complain  so  that  he  has  to  meet  the  outside  quotation. 

If  the  goods  come  into  the  store  billed  at  $2.50  per  dozen, 
they  may  slip  by  without  getting  much  attention  if  they  are 
something  that  sells  only  once  in  a  while.  The  general-store 
man  does  not  dig  very  deep  into  facts  and  figures  on  the  items 
of  semi-occasional  sale.  But  let  an  article  get  to  where  he  is 
buying  it  regularly  and  finds  that  he  must  give  up  20  cents  for 
something  to  sell  for  a  "quarter,"  and  he  will  investigate  the 
cause  and  forever  after,  in  spite  of  changes  in  policy  or  even 
price,  remain  antagonistic  to  the  goods. 

In  order  to  acquire  the  trade  of  the  country  storekeeper  the 
manufacturer  must  start  right.  In  order  to  retain  that  trade, 
he  must  keep  right.  He  must  not  make  the  fatal  error  of  raising 
the  price  just  because  he  thinks  the  trade  will  insist  on  having 
the  goods.  The  country  storekeeper  will  not  insist  on  ha\4ng 
anything  but  a  profit.  It  may  be  a  difficult  thing  to  get  him 
to  stock  your  line  at  first,  but  it  is  nothing  compared  with  the 
difficulty  of  getting  him  to  restock  it  after  once  getting  dis- 
gusted with  it  and  throwing  it  out. 

What  kind  of  trademarked  goods  does  the  general  store  sell 
in  quantity  sufficient  to  be  of  interest.'*  He  sells  all  the  neces- 
saries of  life,  of  course.  Some  of  these  are  trademarked  brands 
and  some  are  not.  Many  of  those  which  he  sells  in  bulk  or  in 
brands  not  trademarked  would  be  replaced  by  the  advertised 
kind  if  the  right  kind  of  encouragement  were  offered.  In  some 
cases  this  replacement  has  occurred. 

Here  are  some  of  the  goods  in  which  the  farmer  is  specially 
interested  and  which  might  be  sold  to  him  in  trademark  brands : 

Veterinary  remedies,  machinery  and  implements,  tools,  locks,  chains,  and 
ropes,  wagon  and  auto  jacks,  kitchen-ware,  foot-warmers,  axes,  heavy  shoes, 
seeds,  harvesting  machinery,  gmis  and  anmiunition,  farm  explosives,  gasoline 
engines,  wire  fencing,  refrigerators,  builders'  hardware,  poultry  and  stock  foods, 
lamps  and  lanterns,  automobile  and  wagon  accessories,  brooms,  scales,  and 
measures,  cutlery,  horse-blankets,  fur  coats  and  caps,  rubber  boots,  paint,  lap- 
cloths,  fruit-tree  spraying  material  and  tools,  insecticides,  heating  apparatus, 
roofing,  bathroom  supplies,  window  and  door  screens,  oil  or  gasoline  stoves. 


r 


'I 

Ml 

1 

'i' 


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100         RETAILER'S  FIELD  AND  PROBLEMS 

In  addition  to  all  of  these,  the  farmer  and  his  family  are  inter- 
ested in  and  are  possible  pm-chasers  of  practically  everything 
that  any  one  else  buys. 

The  country  general  store  to-day  is  a  distributing  point  for 
supplies  for  a  very  large  proportion  of  our  population.  It  will 
pay  any  manufacturer  to  study  the  census  reports  in  this  con- 
nection. The  possibilities  are  ample  to  occupy  the  mmd  and 
imagination  of  the  most  ambitious. 

One  of  the  best  indications  that  the  village  merchant  will 
adopt  progressive  methods  and  modern  ideas  is  the  tremendous 
success  the  makers  of  computing  scales  and  cash-registers  have 
had  in  selling  in  this  field.  These  are  sold  to  him  purely  on 
their  efficiency  value— a  strong  hint  to  the  manufacturer  who 
may  think  that  the  general-store  merchant  is  uneducatable. 
The  merchant  who  will  buy  modem  equipment  will  buy  trade- 
marked  goods  every  time.    He  is  that  kind  of  a  dealer. 

(2)  APPLICATION  OF  MODERN  METHODS  OF  MANAGEMENT 

Reference  has  been  made  to  the  articles  on  "Keeping  up 
with  Rising  Costs,"  in  which  System  has  presented  some  of 
the  results  of  its  study  into  the  possibility  of  modernizing  retail- 
store  methods.  This  series  will  repay  any  retailer  for  any 
amount  of  careful  study. 

The  principles  of  scientific  management  as  developed  by  the 
late  Frederick  W.  Taylor  were  worked  out,  primarily,  for  indus- 
trial enterprises.  But  the  system  of  thought  upon  which  they 
are  based  certainly  has  value  in  commercial  operations  as  well. 
Most  of  the  refinements  of  the  system  call  for  a  larger  field  for 
application  than  is  furnished  by  the  ordinary  retail  store,  but 
the  ^ve  principles  described  in  the  following  article  by  C.  Ber- 
trand  Thompson  clearly  have  value  to  any  retailer.  And  sooner 
or  later  they  will  perform  their  part  in  bringing  retailing  to  a 
better  basis: 

♦Runnmg  a  retail  store  by  scientific  management  is  an  idea 
quite  new  to  store  managers.     They  have  heard  of  scientific 

*Sydem,  December,  1914,  p.  568.      Other  articles  in  this  series  are  to  be 
found  in  System,  January.  1915,  p.  66,  and  Februaiy,  1915,  p.  178. 


RETAILER'S  FIELD  AND  PROBLEMS 


101 


management  and  the  possibility  of  its  application  to  railroads, 
and  they  know  that  factories  and  a  few  government  establish- 
ments are  being  operated  under  scientific  management.  The 
popular  idea  of  this  particular  development  is  that  it  consists 
in  the  application  of  stopwatches  and  motion  study  to  the  work 
of  operatives  and  the  administration  of  a  factory  with  an  ex- 
cessive amount  of  red  tape. 

One  would  not  have  to  reflect  long,  however,  to  arrive  at  the 
conclusion  that,  if  this  is  all  scientific  management  consisted 
of,  it  would  have  died  a  natural  death  long  ago,  instead  of  being, 
as  it  is,  the  livest  issue  in  modern  industrial  developments. 
Scientific  management  includes  time  study  and  motion  study 
and  an  elaborate  number  of  forms  and  records  which  naturally 
gives  the  appearance  of  red  tape.  But  these  things  do  not 
constitute  the  system;  they  are  merely  parts  of  the  mechanism. 
The  system  itself  consists  of  a  series  of  principles  whose  applica- 
tion, as  made  by  Fred  W.  Taylor  and  his  group  of  engineers, 
is  but  one  particular  form.  The  mechanism  is  in  many  cases 
not  adaptable  to  retailing,  but  the  principles  are.     .     .     . 

The  fundamental  principles  of  scientific  management 

J^       as  practised  in  industrial  establishments  are:  first,  the 

mental     organization  of  the  present  scattered  knowledge  in 

Principles   regard  to  the  business  into  a  coherent  science;  and, 

second,  the  organization  of  the  human  and  material 

factors  involved  to  secure  the  most  efficient  application  of  the 

science. 

That  there  is  a  science  of  production  has  been  known  to 
engineers  and  factory  managers  for  decades;  and  that  this  sci- 
ence includes  not  merely  the  chemistry  and  physics  of  engi- 
neering, but  the  technique  of  machine  operation  and  hand  work 
has  been  demonstrated  for  years  under  scientific  management. 
As  Mr.  Taylor  has  shown,  there  is  a  science  of  shovelling  as 
well  as  a  science  of  bridge  building — simpler,  of  course,  but  none 
the  less  ascertainable  and  definite.  There  is  a  science  of  selling, 
too,  and  many  people  are  trying  to  find  out  what  it  is,  thus  recog- 
nizing the  application  of  this  manufacturing  principle  to  market- 
ing. 

The  principal  methods  in  a  scientifically  managed  factory  for 
securing  proper  organization  of  the  human  and  material  factors 
include:  first,  the  selection  of  the  right  men  for  the  job;  second, 
the  systematic  training  of  each  man  for  his  job  and  for  transfer  to 
other  jobs  when  needed;  third,  an  accurate  determination  of  a 


wsmsmm 


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RETAILER'S  FIELD  AND  PROBLEMS 


103 


definite  quantity  and  quality  of  work  which  each  man  may  reason- 
ably be  expected  to  produce,  day  in  and  day  out,  without  in- 
convenience; fourth,  the  establishment  of  such  conditions  as 
will  in  every  way  facilitate  the  work  of  the  operator,  such  as 
careful  planning  of  all  work  in  advance  and  having  on  hand  at  the 
machine  or  work  place  all  the  materials,  tools,  and  instructions 
necessary  for  the  workman  to  proceed;  fifth,  the  payment  of  a 
wage  suflficient  above  the  ordinary  to  be  an  inducement  to  the 
workman  to  accept  the  instruction  and  other  facihties  offered 
him. 

Some  of  these  methods  are  already  familiar  to  store  and  sales 
managers  and  have  been  consciously  developed,  in  some  cases, 
to  a  high  degree  of  perfection. 

Though  it  cannot  be  said  that  the  selection  of  salespeople, 
buyers,  and  the  force  of  help  about  a  store,  is  done  on  any  no- 
ticeably scientific  basis,  it  is  evident  that  considerable  thought 
has  been  given  to  the  training  of  such  people  as  are  actually 
employed.  Classes  in  salesmanship  are  quite  common.  Com- 
mittee naeetings  of  buyers,  and  so  on,  practically  amount  to  the 
same  thing;  and  frequent  conferences  between  the  heads  of  a 
concern  and  their  subordinates  are  in  many  stores  the  occasion 
of  definite  instruction.  Conventions  of  salesmen  arc  utilized 
for  the  same  purpose.  Thus  the  second  method  has  secured 
considerable  recognition. 

The  establishment  of  a  quota  of  sales,  whether  as  the  basis 
for  the  tenure  of  a  job  or  the  fixing  of  a  salary,  is  a  recogni- 
tion of  the  third  method:  the  estabHshment  of  a  definite  task. 

Fixing  the  salary  proportionally  to  the  sales  made,  whether 
in  the  form  of  commission,  bonus,  premium,  or  what  not,  is 
in  a  degree  a  recognition  of  the  fifth  method — I  say  "in  a  degree" 
because  the  increased  compensation  in  selling  is  usually  paid 
simply  for  the  product;  that  is,  the  quantity  of  sales  and  not, 
as  in  factories  operating  under  scientific  management,  for  the 
acceptance  of  instruction  and  increased  facilities  provided  by 
the  management,  which  brings  with  it  as  a  by-product  an  in- 
crease in  output.  Commission  and  premium  schemes  as  ap- 
Elied  to  sales  are  more  like  the  old  piece-rate  system  in  factories. 
a  the  piece-rate  system  some  one  sets  a  rate  according  to  his 
judgment,  and  the  worker  is  paid  exactly  in  proportion  to  the 
number  of  pieces  produced.  The  management  does  nothing 
in  particular  to  assist  him  in  production,  but  depends  on  the 
operator's  initiative  and  abihty  to  devise  improvements  and 


increase  his  output.  This  is  evidently  entirely  different  from 
the  method  of  scientific  management,  which  has  standardized 
so  far  as  possible  all  the  conditions  under  which  the  operator 
works,  trains  him  thoroughly  to  the  best  use  of  the  conditions 
provided,  sets  a  task  based  upon  the  continuance  of  such  con- 
ditions, and  pays  a  high  rate  for  their  acceptance. 

It  should  be  clear  from  this  comparison  that  the  feature  in 
which  sales  management  is  most  undeveloped  in  comparison 
with  factory  management  is  in  the  organization  of  the  conditions 
in  which  the  work  is  done.  In  other  words,  in  the  adequate 
performance  of  the  duties  which  should  devolve  upon  the  man- 
agement and  which  affect  sales  only  indirectly.  Take  the  stock- 
handling  system  of  any  large  department  store  as  an  example. 
The  store  gives  the  best  of  its  attention  and  ability  to  advertis- 
ing, to  the  selection  of  buyers  and  the  training  of  salespeople; 
but  its  store  and  stock-rooms  are  usually  inadequate,  poorly 
lighted,  poorly  located,  poorly  accounted  for,  and,  in  general, 
in  comparison  with  the  factory  storeroom,  quite  ineJBficiently 
managed.  The  expense  connected  with  the  management  of 
a  storeroom  is  charged  as  "non-productive"  or  "burden"  and 
the  idea,  now  becoming  obsolete  in  factory  management,  that 
overhead  or  indirect  expense  is  a  burden  and  therefore  to  be  re- 
duced to  a  minimum,  still  prevails  largely  in  marketing. 

The  same  observations  apply  to  the  usual  retail  accounting 
systems.  They  are  looked  upon  as  a  necessary  evil.  As  much 
attention  as  is  necessary  is  given  to  the  commercial  accounts — 
those  by  which  the  manager  keeps  posted  on  how  much  he 
owes  and  how  much  is  owing  to  him.  But  of  cost  accounting, 
as  that  term  is  known  to  the  factory  manager,  there  is  little  or 
nothing;  and  yet  it  is  reasonable  to  suppose  that  the  same 
methods  of  cost  accounting  which  have  fully  demonstrated  their 
value  in  manufacturing  might  be  at  least  equally  useful  if  applied 
to  selling.     ... 

.  .  .  The  manufacturer  considered  that  he  existed  to 
make  the  product  and  that  his  chief  problem  was  to  make  it  as 
quickly  and  as  cheaply  as  possible.  The  product  was  apparently 
made  "  at  the  point  of  the  tool,"  and  it  was  therefore  the  technique 
of  machinery,  equipment,  and  material  that  got  his  attention.  It 
was  at  least  twenty  years  ago,  however,  that  manufacturers  dis- 
covered that  there  was  more  involved  in  the  economical  making  of 
a  product  than  merely  the  machinery  and  the  material.  The 
propaganda  of  "costs"  called  his  attention  to  the  fact  that  the 


104         RETAILER'S  FIELD  AND  PROBLEMS 

indirect  expenses  of  his  business  constituted  a  large  element  in 
their  real  cost;  and  with  this  discovery  came  the  resolution  first 
to  find  out  exactly  what  these  indirect  expenses  were,  and  then 
to  take  the  necessary  steps  to  reduce  them  to  the  minimum  con- 
sistent with  efl5cient  operation  or  else  to  make  them  of  value 
proportionate  to  their  cost.  This  determination  to  eliminate 
wastes  of  equipment,  materials,  and  later  of  effort  is  behind  the 
whole  modem  movement  of  scientific  management. 

The  time  seems  to  be  ripe  for  retailers  to  pursue  the  same 
course.  Nothing  is  more  striking  to  the  student  of  industrial 
methods  than  the  co-«xistence  in  the  same  store  of  the  most  re- 
fined methods  of  buying,  advertising,  and  selling,  with  the  very 
crudest  methods  of  receiving,  storing,  handling,  and  delivery 
of  goods,  and  the  most  cumbersome  methods  of  accounting. 
The  relatively  greater  profits  in  retailing — or  perhaps  the  ig- 
norance of  the  retailer  as  to  the  real  extent  of  his  profits — have 
succeeded  in  covering  up  the  necessity  for  close  supervision 
and  the  importance  of  detail.  Retail  merchants,  however,  are 
already  bitten  with  the  cost  germ  and  are  discovering  that  their 
profits  are  not  quite  what  they  thought  they  were.  Or  else 
they  have  begun  to  take  a  pride  in  the  efficient  management  of 
their  business  for  the  sheer  artistic  satisfaction  that  comes  from 
doing  a  thing  exactly  right,  and  they  appear  to  be  at  least  in  a 
receptive  attitude  toward  scientific  management. 

As  the  store  manager  reads  this  and  reflects  on  the  great 
mass  of  printed  forms,  running  into  the  hundreds,  which  he 
uses,  he  may  wonder  what  these  statements  mean.  It  looks 
to  him  as  though,  if  his  store  has  anything,  it  certainly  has  sys- 
tem. It  undoubtedly  does  have  system  of  the  type  familiar  to 
manufacturers  fifteen  years  ago:  that  is,  numerous  and  vari- 
egated cards  and  sheets,  expensively  ruled  and  highly  colored. 
It  is  the  very  quantity  and  complexity  of  these  forms  and  the 
clumsiness  of  their  use  which  open  him  to  the  charge  of  waste- 
fulness. Retail  merchants  should  see  what  manufacturers 
have  long  since  discovered,  that  efficient  system  does  not  con- 
sist in  a  multiplicity  of  forms,  but  in  the  quick,  accurate,  and 
economic  securing  of  valuable  results  in  the  way  of  useful  in- 
formation in  regard  to  the  business,  and  more  particularly  in 
the  reduction  of  wasted  effort. 

The  extent  of  antiquated  methods  in  the  administration  of 
retail  establishments  as  revealed  by  recent  investigations  would 
almost  lead  one  to  question  whether  store  managers  are  any- 


RETAILER  S  FIELD  AND  PROBLEMS 


105 


The 
Place 

to 
Begin 


where  near  ready  for  any  form  of  scientific  management.  One 
gains  reassurance,  however,  from  the  readiness  with  which  shoe 
retailers  are  accepting  and  installing  the  imiform  cost  account- 
ing system  developed  and  provided  for  them  by  the  Harvard 
University  Bureau  of  Business  Research.  Reports  from  all  over 
the  country  indicate  that  tliis  system  is  not  only  being  adopted 
bodily  by  leading  shoe  retailers  but  is  also  influencing  the  account- 
ing system  and  business  methods  of  many  more.  This  cost 
system  should  lead  retailers,  as  similar  systems  led  manufactur- 
ers, to  take  the  next  step,  which  is  to  reduce  the  costs  of  doing 
business  as  soon  as  those  costs  are  accurately  ascertained. 

As  I  have  pointed  out  in  former  articles,*  the  beginning  of 
wisdom  is  analysis  and  classification.  A  classification  once 
made  is  exceedingly  useful  and  pays  for  itself  many 
times  over,  as  will  be  shown  later.  But  even  more 
valuable  than  the  classification  is  the  detailed  analysis 
of  the  business  which  is  necessary  before  classification 
can  be  begun.  Before  you  can  classify  your  costs,  you 
must  know  exactly,  exhaustively,  and  in  minute  detail  what  you 
are  spending  your  money  for;  and  the  mere  gathering  of  this 
information  and  putting  it  down  on  paper  is  in  itself  a  startling 
eye-opener. 

Probably  the  first  thing  it  will  show  is  that  from  twice  to 
five  times  more  blanks  and  forms  are  being  used  than  are  neces- 
sary, and  that,  with  proper  management,  the  clerical  force  can 
be  considerably  reduced  and  quicker  and  more  accurate  results 
secured.  It  will  also  undoubtedly  show,  in  a  fairly  large  store, 
that  the  stock  of  supplies  of  various  sorts,  such  as  wrapping 
paper,  twine,  elevator  suppHes,  janitor's  supplies,  and  so  on, 
is  a  considerable  but  indefinite  quantity,  scattered  all  over  the 
place,  and  subject  to  no  direct  control  whatever. 

If  the  store  runs  a  soda  fountain  or  a  restaurant,  an  analysis 
of  costs  will  probably  show  first  that  they  (or  at  least  the  restau- 
rant) do  not  pay;  and  an  analysis  of  supplies  will  probably  show 
a  variety  of  brands  and  of  prices  and  a  laxity  of  control  which 
may  account  largely  for  the  deficit. 

You  undoubtedly  have,  or  can  easily  get,  a  sufficiently  good 
system  of  accounting  for  your  merchandise.  You  know  from 
your  inventory  the  billed  prices  of  your  purchases,  the  freight 

*The  earlier  articles  to  which  Mr.  Thompson  refers  will  be  found  in  System 
for  September,  October,  and  December,  1912,  and  January,  February,  March, 
and  April,  1913. 


106         RETAILER'S  FIELD  AND  PROBLEMS 

and  cartage  on  them,  and  the  discounts.    It  is  not  so  safe  to 
wager  that  you  know  or  can  get  easily  the  depreciation  on  your 
stock  or  the  cost  of  returned  goods  in  the  course  of  a  year;  but 
even  this  you  may  have.    If  you  are  right  up  to  the  minute,  you 
know  the  cost  of  heat,  light,  power,  repairs,  and  renewals  of 
equipment,  depreciation  of  equipment,  oflSce  supplies  and  ex- 
penses; and,  of  course,  it  is  easy  to  get  your  rent,  insurance, 
taxes,  and  licenses,  and  management  of  office  salaries.     If  you 
are  running  a  small  store  as  a  unit,  you  can  know,  with  this  in- 
formation in  hand,  whether  you  are  making  a  profit.     But  if 
your  store  is  departmentalized  even  to  the  slightest  extent,  it 
is  reasonably  certain  that  the  indirect  expenses  are  not  being 
apportioned  properly  over  your  departments  and,  consequently, 
that  you  cannot  tell  which  departments  are  running  at  a  profit 
or  at  a  loss  and  how  much  the  profit  or  loss  is  per  department. 
For  you  must  remember  that  the  mere  accounting  for  merchan- 
dise does  not  give  you  this  information.    Your  merchandise 
accounts  may  show  a  profit  for  a  department  which  is  in  fact 
entirely  wiped  out  by  a  proper  apportionment  of  your  indirect 
expenses;  and  it  is  precisely  this  indirect  expense  which  store 
managers  as  a  rule  loiow  little  or  nothing  about. 

The  analysis  and  classification  of  costs  which  I  shall  describe 
IS  intended  to  make  it  easy  to  determine  the  exact  amount  of 
indirect  as  well  as  direct  cost  and  to  provide  a  quick  and  easy 
method  of  api^ortionment  of  the  indirect  over  the  direct  cost. 
It  IS  not  an  easy  and  simple  matter  to  make  the  analysis  and 
classification.  On  the  contrary,  it  calls  for  a  great  deal  of 
thought  and  painstaking  care.  But  as  usual,  thorough  plan- 
ning means  easy  application;  and  that  such  is  the  case  with  this 
analysis  and  classification  has  been  demonstrated.  Applied 
to  an  up-to-date  department  store  in  which  the  manager  got 
each  month,  from  twenty  to  thirty  days  after  the  end  of  the 
month,  an  accurate  distribution  sheet,  its  first  result  was  to  get 
the  distribution  sheet  five  days  after  the  end  of  the  first  month, 
and  three  days  after  the  end  of  the  second.  It  is  now  used  to 
get  a  weekly  distribution  sheet  laid  on  the  manager's  desk  the 
first  thing  Monday  morning. 

For  what  kind  of  things  does  a  store  pay  out  its  cash?  In  the 
first  place,  of  course,  it  pays  salaries  and  its  bills  for  merchandise, 
aiid  in  most  cases  rent,  and  interest  on  borrowed  money.  In 
addition  it  has  many  bills  for  freight,  express,  and  cartage,  ad- 
vertismg,  office  supplies,  wrappings  and  deliver>^  expense,  in- 


RETAILER'S  FIELD  AND  PROBLEMS  107 

surance  and  taxes,  repairs  and  renewals  of  equipment.  In  addi- 
tion to  these  actual  expenditures,  the  store  should  have  a  proper 
charge  for  depreciation  on  stock  and  on  fixtures.  There  will 
be  many  other  items  of  expense  such  as  telephone  and  telegraph, 
elevators,  janitor  service,  stock  handling,  and  so  on,  and  in 
some  large  stores  there  may  be  such  adjuncts  as  an  employ- 
ment department,  an  information  bureau,  waiting  rooms,  and  per- 
haps even  a  bank. 

This  does  not  exhaust  the  list  by  any  means.  Every  store 
has  an  accounting  department  more  or  less  developed,  and 
occasionally  has  to  meet  legal  expenses  and  to  pay  for  protec- 
tion against  theft.  One  of  its  largest  items  is  likely  to  be  for 
advertising,  including  primarily  newspapers,  window  dressmg, 
catalogues,  and  billboards,  and  extending  into  a  wide  variety  of 
special  advertising  accounts,  such  as  contributions  to  charities, 
fairs,  and  so  on,  dodgers,  circular  letters,  programs,  magazines, 
and  gifts,  such  as  playing-cards,  fans,  rulers,  pencils,  and  so  on, 
inscribed  with  the  name  of  the  concern. 

To  illustrate  in  further  detail,  the  advertising  department 
may  employ  special  men  of  its  own,  requiring  salaries  and  wages; 
there  will  be  certain  telephone  and  telegraph  charges  against 
this  department  alone;  it  will  consume  a  considerable  quantity 
of  supplies  and  stationery,  and  in  some  cases  may  even  main- 
tain a  small  printmg  plant  to  set  up  large  newspaper  advertise- 
ments in  advance.  1    1      •£  J 

All  these  items  and  more  need  to  be  analyzed  and  classined. 
The  procedure  will  be  explained  in  a  second  article. 


I 


^^Ai 


"DEALER  HELPS 


*t 


lOd 


t 


I 


CHAPTER  IV 

"dealer  helps"  from  the  retailer's  viewpoint 

DEALER  HELP"  is  a  term  the  meaning  of  which  is  being 
changed  by  the  bettennent  of  advertising.  The  term 
was  employed  originally  to  describe  various  devices 
provided  by  national  advertisers  to  help  retailers  sell  the 
advertiser's  goods.  The  term  in  this  sense  still  covers  a 
large  part  of  what  is  done  by  national  advertisers  for  re- 
tailers, and  in  this  field  much  progress  is  being  made  year  by 
year. 

But  recently  there  has  been  added  a  new  type  of  dealer  help 
which  has  even  larger  promise  for  future  development.  That 
is  the  type  designed  to  help  the  dealer  be  a  better  merchant, 
and  not  merely  to  help  him  sell  more  of  the  advertiser's  goods. 
These  two  types  are  both  making  history  very  fast  and  it  will 
be  worth  while  to  examine  them  before  taking  up  some  of  the 
more  general  features  of  the  relations  between  retailers  and 
national  advertising.  Our  consideration  of  this  adjunct  of 
advertising  will  fall  into  three  main  divisions.  (1)  The  atti- 
tude of  the  retailer  toward  dealer  helps,  (2)  Some  accepted 
forms  of  dealer  help,  (3)  Methods  of  using  dealer  help. 

(1)  the  attitude  of  the  retailer  toward  dealer  helps 

There  is  no  satisfactory  way  to  learn  how  a  majority  of  re- 
tailers regard  nationally  advertised  goods  nor  how  they  look 
on  the  efforts  in  the  way  of  dealer  help  made  by  national  ad- 
vertisers, because  there  is  no  general  issue,  and  no  chance  for  a 
vote.  Some  retailers  have  expressed  an  opinion,  however,  and 
that  opinion  in  nearly  every  case  resolves  itself  into  favoring 

108 


anything  which  helps  them  make  money  and  preserve  their  in- 
dependence: 

*A  prosperous-looking,  alert  man  about  forty  years  old 
walked  into  the  oflSce  of  Printers*  Ink  the  other  day.  He  wanted 
to  talk  to  somebody  about  the  material  that  advertisers  have 
been  sending  out  to  the  small-town  dealers  this  fall.  His  name 
is  H.  C.  Larimer,  and  he  owns  a  clothing  store  in  Chariton, 
la. — a  big  little  town  of  4,000,  a  typical  Western  farming 
centre. 

Mr.  Larimer  was  persuaded  to  talk  about  the  character  of 
his  town,  and  in  the  course  of  conversation  it  developed  he  did 
a  business  of  $50,000  a  year.  He  had  a  mailing  list  indexed 
and  cross  indexed  to  eliminate  duplicate  work.  This  list  con- 
tained 7,000  "live"  names.  He  was  in  New  York  to  look  over 
the  styles  and  see  what  was  what  on  Broadway.  He  wanted 
to  make  sure  that  the  farmers  who  depended  on  him  for  the  best 
and  latest  would  not  be  disappointed.  Quite  different  from  the 
small- town  dealer  of  your  childhood  days,  isn't  it?  Yet  Mr. 
Larimer  says  he  is  only  one  of  a  number  of  clothiers  belonging 
to  his  association,  who  work  lists  of  this  size,  and  take  just  as 
keen  an  interest  in  giving  these  prosperous  farmers  what  they 
want.  Incidentally  his  views  as  to  what  advertisers  should  and 
should  not  do,  when  it  comes  to  dealer  co-operation — especially 
in  planning  advertising  material — are  mighty  interesting. 

To  start  with,  Mr.  Larimer  made  the  statement  that  with 
one  exception  no  manufacturer  with  whom  he  did  business 
understood  him  or  his  needs.  "They  don't  seem  to  be  able  to 
realize  that  there  is  all  the  difference  in  the  world  between  the 
dealer  in  the  town  of  ten  thousand  and  over  and  the  dealer  in 
the  farming  centres  like  Chariton.  In  the  small  towns  the 
dealer  must  dei>end  largely  on  his  out-of-town  business;  he  does 
business  on  mail-order  principles,  and  he  requires  a  different 
kind  of  co-operation  from  his  larger-town  brother. 

"I  want  good,  high-grade  advertising  material,"  he  said, 
"especially  the  kinds  which  I  can  use  in  connection  with  the 
mail  campaigns  which  I  am  constantly  waging.  But  I  won't 
use  anything  that  is  not  designed  to  appeal  to  the  farmer.  I 
want  different  material  for  different  purposes:  material  for  the 
farmer,  his  hired  man,  or  his  son.    This  material  should  have  a 


*Pnnteri  Ink,  November  26,  1914.  p.  45. 


i 

r 


110 


"DEALEH  HELPS" 


c< 


fann  flavor  about  it;  a  manufacturer  shouldn't  waste  postage 
on  style  books,  mailers,  blotters,  and  such  matter  ornamented 
with  a  picture  of  some  milk-fed  youth  with  blooming  cheeks 
and  chic  airs.  I  want  men,  real  men,  the  kind  we  see  out  in 
Iowa. 

"But  all  this  material,  to  appeal  to  mc,  must  be  prepared 

with  some  definite  purpose.     In  other  words,  I  won't  waste 

.    good  American  postage  stamps  on  a  whole  lot  of  dis- 

M^chant    ^^^^^^^^  advertising  matter.     Neither  do  I  want  a 

Wants  ^^^  ^^  s^^ff  thrown  at  me  fighting  the  mail-order  houses. 
Mail-order  competition  is  bad  enough  witliout  being 
reminded  of  it,  and  besides  that  is  not  the  way  to  fight  mail- 
order competition.  What  I  want  is  advertising  material  that 
connects  my  store  up  with  advertising  in  publications  which  the 
farmer  and  his  family  read;  but  it  has  to  do  it  in  a  way  that  will 
not  rob  me  of  ray  individuality." 

"Just  what  do  you  mean,  Mr.  Larimer,  by  robbing  you  of 
your  individuality?'* 

"I  mean  55  per  cent,  of  the  material  I  receive — electros, 
booklets,  signs,  window  trims,  and  the  rest  of  it — I  never  use, 
because  whoever  designed  it  is  not  familiar  with  how  a  small- 
town dealer  sells  a  nationally  advertised  line.  They  seem  to 
think  we  go  out  and  say:  *Look  here,  I  have  been  honored  by 
having  been  chosen  by  the  Jones  Dustless  Duster  Company 
to  represent  it  in  Chariton. '  Well,  I  don't,  and  no  one  else  with 
any  brains  does.  What  we  do  say  is  this:  *  After  looking  over 
every  possible  line  of  clothes  to  find  the  one  best  suited  for  your 
particular  needs,  I  have  decided  upon  Hart,  Schaffner  &  Marx 
clothes,  and  because  of  my  knowledge  of  goods  and  styles  you 
may  be  assured  that  when  you  buy  your  suit  from  me  you 
will  be  well  satisfied.'  And  we  expect  the  advertising  matter 
which  the  manufacturer  sends  us  to  strike  that  same  tone." 

Questioned  further  as  to  just  what  material  fitted  into  his 
advertising  plans  and  would  be  put  to  the  most  effective  use, 
Mr.  Larimer  said:  "Of  course,  my  mailing  list  is  the  backbone 
of  my  business.  Upon  it  I  depend  for  the  gi^test  percentage 
of  my  sales;  but  at  the  same  time  I  do  a  lot  of  newspaper  ad- 
vertising and  appreciate  good  electros.  I  will  not  use  electros, 
however,  which  advertise  a  manufacturer's  product  too  obviously. 
I  can't  afford  to  have  people  think  I  am  cheap.  Rather  than 
give  that  impression  I  would  send  50  or  75  cents  away  to  a 
stock  cut  house,  whose  catalogues  I  have,  and  get  cuts  of  my 


DEALER  HELPS" 


111 


own.  Neither  will  I  use  the  cut-and-dried  ready-made  ads, 
although  I  suppose  there  are  lots  of  country  dealers  who  are 
foolish  enough  to  use  them.  It  has  always  been  the  idea  of  the 
members  of  the  Iowa  State  Clothiers'  Association  that  if  news- 
paper space  is  worth  buying  it  is  worth  using  to  good  advantage 
to  advertise  our  store  and  not  some  manufacturer's  underwear. 

"I  think  the  plan  of  the  Superior  Underwear  Company  is  one 
of  the  best  I  have  seen  for  some  time.     This  concern  will  send 

Praises    Y^^  cuts  for  illustrative  purposes  without  mentioning 

Suverior  its  name.  I  just  saw  a  large  half -page  cut  of  this  com- 
Und^noeaT  pany  used  in  connection  with  a  Harvest  Home  sale. 
^  Any  fair-minded  dealer  will  agree  to  mention  your 
product  in  the  ad;  but  in  the  name  of  efficiency  don't  try  to 
get  your  money's  worth  by  sticking  your  name  all  over  it. 
When  you  do  you  are  simply  labelling  the  dealer  as  being  too 
cheap  to  get  cuts  made  especially  for  him." 

Mr.  Larimer  talked  so  understandingly  about  advertising 
that  he  was  asked  where  he  acquired  his  information.  "Well," 
said  the  gentleman  from  Iowa,  "we  have  had  to  educate  our- 
selves or  go  out  of  business.  The  only  way  to  fight  the  mail- 
order people  is  with  their  own  weapons — advertising.  And 
so  we  have  set  out  to  be  just  as  good  advertising  men  in  our 
little  centres  as  we  possibly  can  be.  It  is  remarkable  what  a 
man  will  learn  when  he  has  to. 

"Then,  of  course,  there  are  other  educational  forces  at  work. 
We  read  the  same  trade  papers  as  does  the  merchant  in  the 
larger  city,  and  usually  read  them  more  thoughtfully,  as  we  have 
to  depend  more  on  them.  Manufacturers  like  Hart,  Schaffner  & 
Marx  are  continually  educating  us  into  being  better  dealers;  and 
just  lately  some  of  the  farm  papers.  Successful  Farming  for  in- 
stance, seem  to  have  realized  that  their  future  depends  to  a  great 
extent  on  getting  us  lined  up  with  them,  and  they  have  started 
in  to  show  us  how  to  tie  up  our  stores  with  advertising  carried 
in  their  columns.    So  you  see  we  have  education  a-plenty."   .   .   . 

But  before  the  maximum  benefit  can  be  secured  through  these 
dealer  helps,  the  rural  dealer  and  his  way  of  thinking  and  doing 
business  must  be  given  serious  study  and  thought.  Some  ad- 
vertisers are  even  going  so  far  as  to  establish,  under  the  super- 
vision of  some  successful  salesman  in  the  small-town  field,  a 
separate  division  to  develop  and  promote  business  in  the  small- 
town market.  The  packers,  for  instance,  are  doing  this  in  their 
fertilizer  and  animal  food  departments.    With  the  bulk  of  the 


:if 


« 


DEALER  HELPS" 


t 


i 


I 


$8,498,311,000  which  represents  the  value  of  American  farm 
products  passing  through  the  small-town  channel,  surely  the 
field  is  worthy  of  special  cultivation  and  special  study.  It  is 
too  valuable  an  outlet  to  let  go  by  default. 

S.  R.  McKelvie,  publisher  of  the  Nebraska  Farmer,  presented 
at  the  Toronto  Convention  of  the  Associated  Advertising  Clubs 
of  the  World  some  interesting  views  of  Nebraska  storekeepers 
on  this  question.    He  said : 

♦Recently  I  secured  reports  from  one  hundred  and  twenty- 
five  Nebraska  retailers,  advising  me:  First,  whether  they  prefer 
to  handle  advertised  or  non-advertised  brands  of  merchandise; 
second,  what  percentage  of  each  they  sell;  and,  third,  the  names 
of  some  well-known,  nationally  advertised  lines  handled  by 
them. 

A  large  majority  of  the  retailers  that  reported  to  me  indicated 
a  preference  for  advertised  brands.  It  was  particularly  no- 
ticeable that  this  majority  was  developed  in  the  smaller  com- 
munities. 

The  one  hundred  and  twenty-five  retailers  who  gave  me  this 
data  indicated  that  sales  of  advertised  goods  average  approxi- 
mately 42  per  cent,  of  their  total  business.  In  the  list  of  ad- 
vertised brands  carried  by  them  I  find  practically  every  article 
that  is  seen  advertised  nowadays  in  all  the  various  classes  of 
publications. 

Quoting  from  among  the  one  hundred  and  twenty-five  com- 
munications, here  are  some  of  the  arguments  against  handling 
advertised  brands  advanced  by  Nebraska  retailers — mostly  by 
those  doing  business  in  larger  cities: 

One  retailer  says:  "I  prefer  to  sell  non-advertised  goods  as 
they  usually  have  more  merit.  Fifty  per  cent,  of  the  adver- 
tised goods  in  my  line  could  not  be  given  away  if  they  were  not 
advertised."  But  he  also  says:  "Let  us  have  more  advertising 
but  cleaner  and  more  honest  advertising.  The  publisher  is  the 
one  who  can  bring  this  about." 

Nearly  every  retailer  opposed  to  advertising  is  antagonistic 
because  of  the  small  margin  of  profit  allowed  on  advertised  goods. 
On  this  point  I  quote  the  following: 

*Printer»'  Ink,  August  13,  1914,  p.  42. 


"DEALER  HELPS" 


113 


1.  "There  is  hardly  a  nationally  advertised  product  upon 
which  there  is  a  reasonable  profit  to  the  retailer.  Advertising 
helps  to  make  sales,  but  not  money,  for  the  retailer." 

2.  From  one  who  says  that  about  10  per  cent,  of  his  sales  are 
of  advertised  goods:  "We  can  hardly  say  that  we  prefer 
to  handle  advertised  goods  as  a  whole.  But  we  do  find  it  ad- 
vantageous to  handle  them  in  about  the  proportion  that  we  do. 
This  is  because  of  the  good  that  we  get  out  of  the  advertising, 
though  we  feel  that  this  cost  has  to  be  paid  by  some  one." 

3.  "Nationally  advertised  goods  cost  more  money  and  are  not 
any  better  than,  if  as  good  as,  non-advertised  goods." 

4.  "Under  a  recent  court  ruling  the  large  department  stores 
cut  the  price  of  nationally  advertised  goods  and  at  the  same  time 
make  long  profits  on  non-advertised  goods." 

5.  "As  a  rule  the  margin  of  profit  on  nationally  advertised 
goods  is  too  low.  We  prefer  to  handle  jobbers'  private  brands 
exclusively  because  of  a  better  margin  of  profit." 

6.  "Non-advertised  goods  are  sold  to  the  retailer  for  less 
money  and  allow  a  margin  of  profit  which  enables  him  to  do  his 
own  advertising.  It  also  allows  him  to  sp>ecialize  on  goods  that 
are  not  carried  by  all  his  competitors.  Advertising  helps  the 
manufacturer  at  the  retailer's  expense." 

7.  "The  tendency  of  all  advertised  lines  is  to  force  the  re- 
tailer to  handle  the  products  without  a  profit." 

8.  "Advertised  goods  cost  the  retailer  more,  quality 
SinmU  ^^^sidered,  and  are  used  by  mail-order  houses  in  many 
Profit     instances  as  leaders  at  cut  prices." 

9.  "We  can  buy  non-advertised  goods  a  little 
cheaper  than  the  advertised  lines.  Furthermore,  we  want  the 
name  of  our  store  to  stand  out  pre-eminently  in  the  minds  of  our 
customers,  instead  of  the  name  of  some  manufacturer." 

10.  An  Omaha  retailer  says,  "The  purchaser  of  the  non-ad- 
vertised article  makes  his  selection  upon  his  own  judgment 
rather  than  upon  that  of  the  persuasively  worded  advertisement 
which  is  bound  to  be  an  ex  parte  statement.  Ninety-eight  per 
cent,  of  all  the  sales  of  nationally  advertised  goods  should  be 
attributed  to  the  power  of  advertising,  as  it  is  a  fact  that  such 
goods  are  seldom  personally  recommended  by  the  seller." 

There  seems  to  be  considerable  antagonism  to  advertised 
goods  because  of  the  fact  that  they  are  occasionally  sold  to 
mail-order  houses,  and  are  by  them  listed  at  a  lower  price  than 
the  retailer  is  obliged  to  ask  for  them.    This  fact  is  indicated  in 


'li» 


'  i^bp  ' 


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If 

1. 11 


114 


« 


DEALER  HELPS 


if 


the  following,  which  comes  from  a  small-town  retailer:  "Some 
years  ago  the  Blank  Stocking  Company,  after  years  of  adver- 
tising its  product,  allowed  Sears,  Roebuck  &  Co.  to  catalogue 
its  hose,  for  which  the  merchant  had  to  pay  from  $2.10  to  $2.25 
per  dozen,  at  19  cents  per  pah*.  Blank  &  Blank  Company  did 
practically  the  same  thing.  In  such  cases,  and  in  many  others 
of  the  same  nature,  a  nationally  advertised  product  is  an  injury 
to  any  merchant.  It  is  very  possible  that  Sears,  Roebuck  & 
Co.  did  not  pay  as  much  for  the  hose  as  the  average  retailer, 
but  they  did  not  make  a  profit,  selling  cost  included,  when  they 
sold  these  hose  at  19  cents.  At  the  same  time,  that  low  price 
created  in  the  mind  of  the  consumer  a  false  impression  since  we 
were  charging  25  cents  and  made  only  a  very  nominal  profit.  It 
is  not  unusual  that  mail-order  houses  have  profited  by  slaughter- 
ing a  nationally  advertised  product,  and  have  at  the  same  time 
discredited  the  retailer,  thereby  enabling  them  to  sell  something 
that  is  not  advertised  at  an  excessive  profit  to  make  up  for  the 
loss  on  the  advertised  article." 

As  arguments  in  favor  of  handling  advertised  goods,  I  submit 
the  following  extracts  from  letters  from  retailers  in  small  towns: 

1.  "Advertised  goods  are  easily  sold.  Quick  sales,  smaller 
profits,  and  manufacturers*  co-operation  can't  be  beat.  Any 
national  campaign  of  advertising,  if  properly  displayed,  will 
produce  results  for  the  retailer;  but  the  retailer  must  co-operate 
with  the  manufacturer  through  window  displays  and  other- 
wise.'* 

2.  "It  gives  to  a  store  a  standing  that  cannot  otherwise  be 
gained  when  goods  are  found  in  stock  that  are  well  known  to  the 
people  who  call." 

3.  "Too  much  time  is  lost  in  introducing  non-advertised  ar- 
ticles." 

4.  "Nationally  advertised  lines  are  those  of  quahty,  high 
class,  that  give  a  store  distinction,  are  sold  on  a  close  margin, 
a  sure  quality  and  good  value.  Price,  to  our  customers,  is 
secondary  to  quality." 

5.  "We  believe  that  there  is  less  dead  stock  among  goods 
that  are  advertised  by  the  manfacturer.  Also,  we  know  that 
advertised  goods  are  more  easily  sold  and  better  goods  as  a  rule; 
for  national  advertising  means  national  competition." 

6.  "Ease  and  speed  in  disposing  of  customers  is  the  principal 
reason  why  I  handle  advertised  goods.  I  could  make  more 
money  on  other  lines  for  the  individual  sale,  but  saving  of  time 


(< 


DEALER  HELPS" 


115 


and  increased  sales  make  the  advertised  lines  more  remunera- 
tive." 


In  connection  with  an  article  on  dealer  window  displays  pre- 
pared by  A.  M.  Lucas,  Second  Vice-President  of  the  George  F. 
Eberhard  Company,  appearing  in  Advertising  and  Selling, 
March,  1915,  there  was  printed  the  following  summary  of  the 
opinion  of  manufacturers  in  ninety-two  lines  of  goods  concern- 
ing different  forms  and  methods  of  dealer  help: 

(1)  Ninety  per  cent,  of  the  manufacturers  quoted  consider 
dealers*  window  space  valuable. 

(2)  Eighty-two  per  cent,  consider  that  the  attitude  of  their 
dealers  is  favorable  to  their  dealer  helps;  15  per  cent,  that  it  is 
unfavorable;  and  3  per  cent,  that  the  attitude  of  country  dealers 
alone  is  favorable. 

(3)  The  average  estimate  is  that  72  per  cent,  of  the  display 
material  sent  to  dealers  is  used  by  them. 

(4)  The  methods  of  distributing  dealer  helps  used  are  as  fol- 
lows: 75  per  cent,  send  directly  to  dealers;  62  per  cent,  send 
through  salesmen;  80  per  cent,  send  to  dealers  upon  their  re- 
quest; 33  per  cent,  send  to  dealers  without  their  request. 

(5)  The  considerations  which  influence  dealers  to  put  up  dis- 
plays or  signs  are  estimated  to  rank  thus:  desire  for  gain,  70 
I>er  cent. ;  co-operation  with  the  manufacturer,  47  per  cent. ;  lack 
of  more  attractive  material,  36  per  cent. ;  liking  for  salesman,  25 
per  cent. ;  because  manufacturer  pays  for  space,  2  per  cent. 

(6)  Ninety  per  cent,  of  the  manufacturers  quoted  use  store 
and  dealer  helps. 

(7)  The  average  percentage  of  advertising  appropriation  de- 
voted to  dealer  helps  is  38.3  per  cent. 

(8)  Twenty-nine  per  cent,  of  the  manufacturers  quoted  state 
that  their  appropriation  for  dealer  helps  is  increasing;  17  per 
cent,  that  it  is  decreasing. 

(9)  Twenty  per  cent,  of  the  manufacturers  quoted  have  a  dis- 
tribution crew.  ♦ 

(10)  Forty-five  per  cent,  of  the  above  manufacturers  using 
window  display  state  that  the  effect  on  sales  of  such  displays  is 
immediate  and  visible;  16.5  per  cent,  report  that  their  effect 
on  gales  in  slow;  39  per  cent,  that  their  effect  on  sales  is  lasting. 


m 


116 


«( 


DEALER  HELPS" 


(2)    FORMS  OF  DEALER  HELP 

Several  valuable  series  of  articles  have  been  printed  in  the  last 

year  or  two  concerning  window  displays.     One  of  the  most  sug- 

Window   gestive  of  these  was  a  series  written  by  M.  P.  Staid- 

I>t*plap9   cup  of  the  Burson  Knitting  Company  of  Rockford, 

Dl.,  manufacturers  of  women's  cotton  hosiery.* 

Prom  these  articles  the  following  quotations  are  made: 

fJust  to  clear  the  ground,  let  me  state  that  the  Burson  Knit- 
ting Company,  like  the  majority  of  manufacturers,  sells  its 
product  through  jobbers.  It  does  not  grant  exclusive  agencies, 
either  to  dealers  or  jobbers,  and  it  has  no  direct  dealing  with  re- 
tailers so  far  as  the  sale  of  its  goods  is  concerned.  Its  product 
(hosiery  exclusively)  is  made  in  an  assortment  of  styles  and 
patterns,  and  in  grades  ranging  in  price  from  25  cents  to  75 
cents.  Its  business  differs  in  no  essential  particular  from  that 
of  hundreds  of  other  manufacturers  of  wearing  apparel,  food 
products,  hardware,  and  so  on 

The  company's  window  displays  in  the  larger  cities  were 
placed  in  a  few  stores  at  a  time  by  myself  or  my  assistants,  were 
allowed  to  remain  for  a  week  or  ten  days,  and  were  then  re- 
moved. In  the  smaller  towns  we  used  a  lithographed  set,  which 
was  sent  to  dealers  upon  request,  and  which  they  themselves 
set  up  from  our  directions. 

When  the  editor  of  Printers*  Ink  asked  me  to  write  these  ar- 
ticles he  told  me  that  he  wanted  them  to  be  thoroughly  practi- 
cal. He  would  expect  me  to  be  able,  he  said,  to  answer  some 
of  the  troublesome  questions  which  manufacturers  are  facing 
in  connection  with  displays  in  their  dealers'  windows.  To 
that  end  he  wrote  to  several  concerns,  asking  them  to  tell  him 
what  particular  features  of  the  problem  would  be  most  inter- 
esting to  them.  Most  of  them  replied  with  a  list  of  questions, 
which  I  have  before  me.  I  shall  endeavor  to  answer  those  ques- 
tions as  fully  as  I  can,  illustrating  my  answers  from  personal 
experience. 

*Pnnieri'  Ink,  November  1S2,  ISU,  p.  17;  November  26.  19U.  p.  iO;  D©. 
cember  17»  1914,  p.  44. 

^Frinierg*  Ink,  November  12,  1914.  p.  17. 


<( 


DEALER  HELPS" 


117 


How  can  the  merchant  be  convinced  that  the  fine  window 
display  benefits  him  as  much  as  the  advertiser  who  furnishes  it.?* " 

Make  It     •  '^^^*'  ^*^  ^  ^^^^  ^^^  ^^  ^^^^  easily  according  to  the 

Ea.9y  for  ^^°^  ^^  stores  in  which  the  goods  are  sold.     Drj^goods 

the  Dealer  ^^^  department  stores  are  easiest  to  convince,  drug 
stores  come  next,  then  hardware  stores.  Grocery  stores 
are  most  difficult,  as  a  rule.  The  first-named  have  been  most 
thoroughly  educated  to  the  value  of  their  window  space,  and 
the  last  appreciate  it  least.  Drygoods  and  department  stores, 
from  the  very  start,  have  dealt  in  goods  which  lent  themselves 
most  obviously  to  display.  The  other  stores  have  needed  out- 
side influence— speaking  broadly— to  show  them  that  their  goods 
also  have  a  display  value. 

Convincing  the  merchant  that  a  display  is  of  benefit  to  him 
depends,  first,  upon  the  quality  of  the  display  as  demonstrated 
by  good  photographs.  No  argument  is  likely  to  get  under  the 
skin  unless  he  is  able  to  see  the  display  as  a  whole  and  use  what- 
ever judgment  he  possesses  in  determining  its  value.  Then,  if 
he  IS  to  install  it  himself,  he  must  be  shown  how  easy  it  is  to  set 
up  and  take  down,  and  perfectly  plain  directions  must  be  given 
so  as  to  convince  him  that  he  can  readily  duplicate  the  effect 
of  the  photograph.  .  .  .  Above  all,  don't  ask  him  to  do 
something  for  you.  Make  it  perfectly  clear  that  you  are  offer- 
ing to  do  something /or  him,  which  will  cost  him  no  money  and 
the  very  least  possible  time  and  trouble. 

In  less  than  three  years  the  Burson  Knitting  Company  has 
secured  the  display  of  more  than  4,000  twelve-piece  Htho- 
graphed  sets,  which  required  not  only  some  time  and  trouble 
to  install,  but  also  required  the  merchants  to  take  some  of  the 
goods  from  stock  and  put  them  into  the  window.  The  cost  of 
the  entire  campaign,  including  everything  down  to  transporta- 
tion charges,  came  to  a  little  less  than  three  dollars  a  set.  Four 
thousand  merchants  were  convinced  that  the  displays  would 
help  them  sell  Burson  hose  by  the  line  of  procedure  outlined 
in  the  foregoing  paragraphs. 

First,  we  advertised  the  display  in  the  trade  papers  which 

reached  our  field.     We  made  it  important  enough  to  devote 

Letting  the  P^ge  spaces  to  it  exclusively.     We  showed  a  photo- 

?^    S^^P^  o^  completed  display  and  offered  to  tell  a  dealer 

mf^jf       ,    ^^  ^^^  ^°^-     W^  ^^  not  offer  to  send  the  outfit, 
"'"^f    only  to  tell  him  how  to  get  it. 

To  all  inquiries  we  sent  a  booklet,  showing  ten  different  ways 


11 


118 


"DEALER  HELPS" 


■ 


in  which  the  material  could  be  combined — in  effect  ten  different 
displays — and  giving  all  the  arguments  for  its  use.  A  post- 
card was  enclosed  which  entitled  the  dealer  to  an  outfit  without 
charge.  The  dealer  was  led  first  to  inquire;  then  he  got  the 
book,  which  he  was  able  to  study  at  his  leisure,  and,  finally, 
after  he  thoroughly  understood  the  proposition,  he  was  led  to 
ask  for  the  material.  If  he  wasn't  convinced  that  it  would  pay 
hinu  he  never  would  ask  for  it.  ...  I  have  been  told  by 
a  merchant  that  I  could  have  his  windows  for  one  of  our  big 
displays  for  so  much  a  day.  "Thank  you,'*  I  usually  replied, 
"but  if  your  windows  aren't  worth  any  more  than  that  we  can't 
afford  to  give  you  the  service.  This  display  cost  a  great  deal 
of  money  to  build,  and  the  company  is  paying  my  salary  and 
that  of  my  assistants  simply  to  give  this  service  to  those  mer- 
chants who  are  important  enough  to  deserve  it.  If  you  don't 
think  that  your  windows  are  worth  a  good  many  times  twenty- 
five  dollars  a  day  to  you,  we'll  have  to  accept  yoiir  own  valua- 
tion of  them,  but  we  are  sorry  to  say  that  it  isn't  high  enough  to 
warrant  us  in  placing  the  display  in  them." 

That  novel  viewpoint  usually  led  to  a  discussion  of  the  real 
value  of  window  space,  and  we  very  seldom  failed  to  secure  the 
window  on  our  own  terms.  It  is  needless  to  say  that  we  never 
accepted  it  on  any  other  terms.     .     .     . 

*"How  can  we  give  our  displays  an  immediate  sales  value,  so 
as  to  bring  actual  customers  into  the  store  while  the  display  is 
Give  Each  installed?"  is  another  question  asked. 
Display  a      I  suppose  any  display,  no  matter  how  poor,  has 

Definite    some  immediate   sales   value,   dej)ending  upon   the 

Message  clearness  with  which  it  delivers  its  message.  What  that 
message  is  depends  in  turn  upon  the  goods  which  are  on  display. 
With  most  things  it  is  necessary  to  inform  possible  buyers  of  the 
quality,  the  styles,  assortments  or  sizes,  and  the  price.  Often 
it  is  necessary  also  to  indicate  what  the  product  will  do.  The 
sales  value  of  the  window  depends  upon  the  definiteness  with 
which  those  things  are  indicated.  A  merely  "pretty"  wmdow 
may  give  an  air  of  attractiveness  to  the  store,  but  does  not 
necessarily  promote  sales  of  any  particular  line  of  goods. 

First,  it  is  important  to  know  the  class  of  buyers  to  whom 
the  appeal  must  be  addressed.    The  Burson  Company,  for 


*Pnnteri  Ink,  November  26,  1914.  p.  20. 


<« 


DEALER  HELPS" 


119 


example,  must  appeal  to  the  middle-class  woman— not  the 
cheap  trade,  nor  the  fashionable  set.  Those  who  wear  silk 
hosiery,  high  or  low-priced,  were  absolutely  eliminated  from  the 
start.  The  bargain-hunter  also  was  eliminated,  since  there  are 
plenty  of  other  concerns  making  hosiery  of  similar  grades,  to 
retail  at  the  same  prices,  and  our  appeal  was  not  based  upon 
price  but  upon  durability  and  lasting  fit.  Our  message  was  just 
this:  "Burson  Fashioned  Hose.  Knit  to  fit  without  a  seam. 
Will  not  lose  their  shape  after  laundering.  Black,  white,  and 
tan.     Twenty-five,  thirty-five,  and  fifty  cents. 

Every  feature  of  the  displays  was  arranged  so  as  to  illustrate 
or  suggest  one  of  those  points.  Plenty  of  decorative  features 
were  used,  but  they  were  never  placed  so  as  to  distract  the  at- 
tention from  the  goods  themselves,  or  the  show-card  in  the  cen- 
tre of  the  window,  low  down,  containing  the  whole  story  in  a 
few  lines  of  tjT)e.  The  central  figure,  posed  in  a  frame  against 
the  background,  might  be  a  girl  in  cap  and  boudoir  gown  display- 
ing a  trim  ankle,  or  a  laundress  hanging  stockings  on  the  line; 
but  whatever  it  was  it  spelled  hosiery,  and  suggested  perfect-fit- 
tmg  qualities  or  lasting  shape.  When  we  displayed  leg  forms, 
the  backs  were  turned  toward  the  glass  to  show  the  construc- 
tion of  the  back  of  the  stocking.  No  price  tickets  were  placed 
on  the  goods,  but  the  range  of  prices  was  announced,  once  for 
all,  upon  the  centre  card,  which  nobody  could  escape. 

As  for  immediate  sales,  we  never  kept  any  very  complete 
records,  for  we  considered  our  windows  as  largely  a  medium 
of  general  publicity— and  with  good  reason,  too,  as  I  shall  at- 
tempt to  demonstrate  later  on.  I  know  of  one  salesgirl  in  a 
Chicago  store  who  sold,  during  the  week  of  the  display,  23 
dozen  pairs  of  Burson  hose.  That  was  a  single  clerk,  in  a  ho- 
siery department  which  carried  probably  a  dozen  other  lines 
of  cotton  stockings.  WTien  a  display  was  installed  I  went  to 
the  hosiery  department  and  talked  with  the  salespeople,  show- 
ing them  how  to  sell  our  goods.  They  were  very  quick  to  make 
use  of  the  points  I  gave  them,  though  they  probably  never 
would  have  discovered  them  for  themselves. 

But  the  best  indication  of  the  immediate  sales  value  of  the 
displays  was  the  purchases  which  the  stores  made  from  the 
Some  Sales  j^P]^^^^'    ^^e  store  in  Pawtucket,  R.  I.,  which  had  a 
Records     ^^""v  representative  stock  when  the  display  was  in- 
stalled, ordered  180  dozen  more  from  the  jobber,  and  re- 
ordered three  times  on  certain  numbers  during  the  week.    A  store 


I: 


I 


I 

1 


f 


■ 


120 


« 


DEALER  HELPS 


» 


in  Lynn,  Mass.»  ordered  78  dozen  and  reordered  during  the  dis- 
play. A  store  in  Manchester,  N.  H.,  bought  between  200  and 
300  dozen.  And  all  of  those  stores  were  stocked  with  some  of  the 
goods  before  the  displays  were  installed,  so  that  the  orders  re- 
corded were  due  almost  wholly  to  the  displays. 

Supplementing  an  investigation  into  certain  aspects  of  win- 
dow displays  which  will  be  found  quoted  elsewhere,  the  Printers' 
Counter     Ink  staff  early   in   1915   made  an   investigation   of 
Displays    counter  displays.     The  following  quotations  are  from 
the  report  of  this  investigation : 

.  .  .  *Several  dealers  were  prevailed  upon  to  give  a  frank 
statement  of  their  attitude  toward  manufacturers*  counter  dis- 
plays. Among  them  was  Charles  Holzhauer,  of  Newark,  N.  J., 
one  of  the  leading  pharmacists  in  the  State  of  New  Jersey  and 
past  president  of  the  New  Jersey  Pharmaceutical  Association. 
Mr.  Holzhauer's  idea  of  counter  display  hinges  principally  on 
the  question  of  profit  in  the  article  to  be  displayed.  He  brings 
out  the  fact  that  many  times  a  fine  display  has  to  be  refused 
bv  him  because  he  has  a  similar  article  under  his  own  name 
which  yields  him  a  better  profit. 

Commenting  upon  the  value  of  the  counter  display,  he  said: 

**Our  counter  space  is  valuable  and  we  must  put  it  to  the  best 
use.  We  do  use  counter-display  devices  very  often  where  the 
article  does  not  conflict  with  other  goods  and  the  profit  is  good. 
A  great  deal  of  money  is  wasted,  I  believe,  in  getting  up  material 
of  this  sort,  which,  falling  into  the  dealer's  hand,  is  at  once  con- 
signed to  the  ash-barrel  because  he  can  sell  the  goods  at  no 
profit." 

One  of  the  greatest  objections  the  dealer  offers  in  not  accept- 
ing a  counter  display  from  a  manufacturer  is  that  the  article  is 
cut  to  such  an  extent  that  it  either  limits  his  margin  of  profit 
or  cuts  him  off  from  a  profit  entirely.  As  a  result,  he  loses  in- 
terest in  the  article  or  his  antagonism  is  aroused  and  he  becomes 
a  critic  of  the  article  instead  of  a  booster.  Where  a  manufac- 
turer has  to  confront  such  a  condition,  he  might  as  well  put  his 
good  money  into  something  else  besides  counter  displays.  In 
one  case  a  manufacturer  under  such  conditions  invested  about 


^Printers  Ink,  April  22,  1915,  p.  8S. 


« 


DEALER  HELPS" 


121 


^000  in  counter  displays,  and  he  is  still  trying  to  give  them 
away.  Formerly,  he  thought  he  would  be  able  to  induce  the 
dealer  to  stock  more  goods  on  the  strength  of  the  counter  dis- 
play, but  latterly  he  was  glad  to  see  the  dealers  accept  the  dis- 
play without  the  order.  In  fact  very  few  cared  to  accept  it. 
It  was  a  handsomely  gotten-up  counter  display  and  quite  origi- 
nal, but  in  view  of  the  fact  that  the  article  was  constantly  being 
exploited  by  cut-price  stores,  the  dealer  was  not  willing  to  give 
the  manufacturer  the  friendly  co-operation  which  he  extended 
to  some  of  the  others.     .     .     . 

The  investigator  saw  as  many  as  five  different  counter  dis- 
plays of  well-known  advertised  brands  in  one  of  the  most  ex- 
clusive shops  in  the  Wall  Street  section  of  New  York.  Seal- 
packerchief  handkerchiefs,  Ingersoll  watches,  Ever-Ready  razors, 
and  Paris  garters  are  displayed  in  most  of  the  leading  men's  fur- 
nishing shops. 

The  hardware  field  is  probably  the  most  lucrative  of  them  all. 
From  interviews  with  the  retailers,  they  all  favor  the  counter 
displays  and  gladly  accept  them.  This  is  due  to  the  fact  that 
many  commodities  in  the  hardware  store  are  bought  upon  im- 
pulse. The  dealer  is  aware  of  this  situation,  and  realizes  the 
necessity  of  the  counter  display.  Many  of  the  fine-tool  manu- 
facturers realize  that  in  order  to  have  the  purchaser  appreciate 
quality  they  must  display  the  tools  in  an  artistic  manner. 
The  L.  S.  Starrett  Company,  Athol,  Mass.,  makes  a  fine  dis- 
play which  it  sends  to  the  dealers.  In  order  that  the  dealer  may 
avail  himself  of  this  display,  it  is  necessary  for  him  to  buy  an 
assorted  outfit  amounting  to  $125.  The  company  makes  up 
several  styles  of  cases — some  are  placed  around  the  post  in  the 
store,  others  are  hung  on  the  wall.  Other  cases  have  drawers 
to  hold  surplus  stock. 

E.  F.  Wing,  treasurer  of  the  company,  says: 

"We  believe  thoroughly  in  the  value  of  these  displays.  We 
have  some  3,500  of  these  cases  in  the  hands  of  dealers  in  this 
country  and  Europe.  From  this  number  in  the  hands  of  the 
dealers  you  can  plainly  see  the  attitude  of  the  dealer  toward 
them." 

Another  manufacturer  of  hardware  and  tools  says  that  the 
dealer  who  will  not  accept  a  counter  display  is  an  exception  to 
the  rule.  "But,"  he  continued,  "displays  must  be  constructed 
in  such  a  manner  as  to  add  to  the  appearance  of  the  store,  and 
must  not  be  too  large  and  bulky." 


11 


4 


in 


*t 


DEALER  HELPS" 


Manufacturers  are  at  liberty  to  draw  their  own  conclusions 
from  the  data  given.  A  few  general  conclusions  may,  however, 
be  drawn.  In  order  to  secure  representation,  a  counter  display 
should  fulfil  the  following  conditions: 

1.  It  should  be  distinctive,  so  that  the  dealer  will  feel  that  it 
will  add  something  to  his  store. 

2.  It  must  feature  goods  which  the  dealer  really  wants  to 
sell,  i.  e.,  goods  which  afford  him  a  good  margin  of  profit. 

S.  It  must  be  presented  as  a  means  to  help  him  sell  more 
goods;  not  as  a  bait  to  get  him  to  buy  more. 

H.  J.  Winsten,  Sales  and  Advertising  Manager  of  the  Chicago- 
Kenosha  Hosiery  Company,  believes  that  dealer  helps  if  properly 
used  may  be  made  to  give  valuable  assistance  in  maintaining 
prices  and  credit  rules.  Some  of  his  ideas  on  the  subject  are  con- 
tained in  the  following  article: 

*Dealers'  co-operation  is  the  business  stimulus  that  the 
manufacturer  injects  into  the  veins  of  the  business  body  of  the 
man  who  sells  his  goods.  Competitive  conditions  have  been 
responsible  for  its  growth.  It's  a  big  problem  in  the  manufac- 
turer's mind  to-day. 

Every  manufacturer  who  is  working  toward  success  through 
the  known  laws  of  business  science  is  askmg: 

"How  can  I  make  my  dealers'  co-operation  more  highly  effi- 
cient?" 

We  have  ^Testled  long  in  the  throes  of  the  problem,  analyzed 
it  carefully  and  then  gone  ahead.  Results  seem  to  prove  we  are 
on  the  right  track.  We  found  two  evils — two  channels  through 
which  money,  time,  and  effort  were  flowing  off  territory  which 
the  manufacturer  seeks  to  irrigate.    These  are: 

Haphazard,  unscientific,  voluminous  distribution  of  dealer 
helps. 

"Pauperizing"  the  dealer  by  doing  all  the  work  and  paying 
ail  the  bills. 

In  sohdng  the  problem  for  ourselves  we  considered  first  the 
vast  quantity  of  advertising  material  that  the  postman  brought 
weekly  to  the  dealer  from  the  various  manufacturers  whose  lines 
he  handled.  We  realized  that  the  value  of  dealers'  advertising 
helps  were  under-estimated  because  of  their  volume  and  their 

*Pnnleri  Ink,  March  12,  1914,  p.  17. 


; 


« 


DEALER  HELPS" 


123 


lack  of  connected  motive.  They  lost  their  dollar  value  in  his 
eyes.  Quantity  meant  cheapness — ^weakness.  That's  what  the 
report  of  our  salesmen  showed. 

Then  we  found  that  other  manufacturers  were  over-stimulat- 
ing the  dealer.  The  result  was  impoverished  business  blood — 
pauperization,  as  we  termed  it. 

These  manufacturers  were  carrying  the  whole  advertising 
burden.  They  were  paying  the  whole  bill.  The  dealer  was 
being  fed  out  of  a  gold  spoon.  He  was  being  deprived  of  his 
own  strength,  made  lazy,  indolent.  To  pay  for  the  dealer's 
local  advertising,  in  almost  every  instance,  is  to  lower  the  dealer's 
estimate  of  its  worth  and  to  strangle  his  own  co-operative 
effort. 

We  go  at  this  whole  proposition  on  a  plan  that  approximates 
the  method  of  promoting  a  show  on  the  road. 

We  put  on  an  "advertising  show."  First,  our  advance  man, 
who  is  a  Black  Cat  salesman,  outlines  our  complete  advertising 

*' Black    plan.     A   special   portfolio   is   turned   over   to   him. 
Cat"  Con-  covering  every  phase  of  our  advertising  work.   Strong 

necHve     emphasis,  however,  is  laid  on  one  particular  week,  say, 

""^P'     for  example,  "  Black  Cat  Week  "  in  April. 

We  explain  what  we  are  going  to  do  in  the  way  of  national 
advertising  at  that  special  time.  Then  our  salesmen  explain 
how  we  have  provided  different  phases  of  local  advertising  to 
make  it  possible  for  the  retailer  to  get  the  full  benefit  not  only 
of  our  advertising  but  to  place  his  hosiery  department  in  the 
best  light  before  the  public. 

We  show  him  full  reproductions  of  an  electro  to  couple  up 
with  our  national  advertising,  using  the  same  illustration  and 
copy  to  fit  local  conditions. 

Perhaps  he  has  no  local  paper,  or  he  may  prefer  to  use  a  lan- 
tern slide,  usmg  the  same  illustration.  Often  the  dealer  takes 
both. 

Our  eight-sheet  poster  fits  in  generally  with  the  same  illus- 
tration, imprinted  with  the  dealer's  name. 

Last,  but  not  least,  we  show  him  a  complete  window  display, 
generally  "before  and  after,"  to  help  him  make  it  right.  The 
window  display  most  likely  incorporates  the  same  iUustration 
as  is  used  in  our  other  plans. 

Furthermore,  the  salesman  shows  the  dealer  other  selling 
helps — notion  envelopes,  folders  emphasizing  the  local  condition, 
with  the  dealer's  name  imprinted,  calendars,  at  the  same  or  a 


i 


m 


"DEALER  HELPS" 


less  price  for  a  few  hundred  as  it  would  cost  him  were  he  to  pur- 
chase 100,000. 
Our  salesmen  make  out  an  advertising  order  as  follows : 


I 


ADVEBTISING  ORDER  jgj 

Send 

How 

Signs No 

Electro No 

Notion  Env 

Folders No 

Slides No 

Poster 

Miscellaneous 

Imprint 

Salesman 

No  advertising  is  ever  sent  to  any  dealer  without  either  a 
salesman's  order  or  a  dealer's  written  order.  Our  salesmen  are 
positively  instructed  to  be  liberal  with  advertising,  but  to  be 
just  as  certain  that  our  retailers  are  using  or  will  use  what  we 
send  them. 

Our  salesmen  are  interested  and  enthusiastic  over  our  ad- 
vertising program.  No  opportunity  is  lost  to  ginger  advertis- 
ing in  the  same  degree  as  selling  Black  Cat. 

We  send  preliminary  notices  to  our  dealers  about  the  special 
campaign.  Then  we  send  a  broadside  description  of  our  April 
week,  with  return  card  for  the  special  electro,  slide,  poster,  and 
window  trim. 

Whatever  the  dealer  orders  is  sent  prepaid  about  ten  days  be- 
fore the  "event "  and  a  letter  goes  out  at  the  same  time. 

Do  we  get  satisfactory  results?  Well,  that's  a  question  of 
comparisons.     We  want  more ! 

In  the  spring  of  1913  we  had  such  a  plan.     We  had  2,214 

requests  for  window  displays.     W^e  sent  out  1,014  electros  for 

Results  of  illustration  and  copy  for  a  newspaper  ad,  nine  inches 

Co-opera-  deep  and  four  columns  wide;  901  slides  were  mailed 

five  Plan  ^q  dealers;  5,000  eight-sheets  were  used  by  dealers, 

nearly  half  through  the  National  Bill  Posters  and  retailers 

were  charged  for  the  posting. 

We  work  this  sales-stimulating  campaign  four  times  a  year. 
Then  the  dealers  use  the  electros  and  slides  throughout  the  year. 
For  example,  we  got  out  special  "Black  Cat  Christmas"  ads. 


i< 


DEALER  HELPS" 


125 


Let  it  be  noted  that  we  seldom  feature  Black  Cat  to  the  ex- 
clusion of  all  other  merchandise.  We  try  to  get  our  dealers  to 
use  both  kinds  of  advertising,  one  featuring  Black  Cat  entirely, 
the  other  featuring  store  service  and  general  quality,  naming 
Black  Cat  as  one  feature  of  quality  and  service. 

We  believe  that  advertising  must  be  one  of  the  important 
links  which  unite  and  bind  the  dealer  and  the  manufacturer. 
It  must  connect  both  to  a  fair,  honest  policy  toward  consumer, 
for  our  mutual  interest  lies  ultimately  in  the  absolute  satisfac- 
tion of  the  consumer.  That's  why  we  tell  our  dealers:  "We 
hold  no  sale  final  which  does  not  result  in  the  customer's  com- 
plete satisfaction." 

What  has  our  advertising  plan  done  for  us.?  It  has  helped 
to  eliminate  to  a  considerable  extent  two  very  disastrous  phases 
of  competition :  Price  and  credit. 

We  hold  steadily  to  our  prices  and  seldom  deviate  from  strict 
credit  rules.  We  are  gradually  building  up  our  retailer  force 
to  a  point  of  high  eflSciency. 

I  think  our  competitors  will  testify  that  it  is  difficult  to  dis- 
lodge Black  Cat  when  it  is  mtrenched  through  our  co-operative 
plans  plus  quality  merchandise. 

Our  selling  and  advertising  department  is  inseparable.  It 
can't  be  "unscrambled."  One  is  the  right,  the  other  the  left, 
arm  of  distribution.  There  is  no  dividing  hne.  They  work 
in  harmony.  Every  stroke  counts  with  the  use  of  both 
arms. 

Generally  the  hosiery  order  and  sales  report  come  in  with  an 
advertising  order.  Both  orders  are  treated  aUke.  Advertising 
orders  are  given  just  as  keen  attention  as  the  hosiery  orders. 
The  different  advertising  material  is  assembled  in  the  advertising 
room  or  in  our  printing  shop,  then  taken  to  the  shipping  room 
to  be  packed  with  the  hosiery  shipments. 

The  shipping  room  has  nothing  to  do  with  the  selection  of  ad- 
vertismg  matter.  It  cannot  hand  it  out  indiscriminately. 
Every  order  specifies  what  and  when  on  advertising  just  as 
plainly  as  the  orders  for  hosiery. 

To  get  distribution  where  there  is  no  appreciable  demand,  the 
manufacturer  must  treat  the  case  differently  from  where  the  dis- 
tributive channel  is  already  effected. 

There  is  room  for  serious  thought  and  discussion  as  to  how 
far  the  manufacturer  should  go  and  what  should  be  done  for  the 
local  dealer  in  the  town  where  the  manufacturer  has  no  dis- 


;![ 


II 


M 


t 


126 


« 


DEALER  HELPS'* 


tribulion  and  his  national  advertising  has  not  been  felt  appre- 
ciably by  any  merchant. 

Our  problem  is  not  so  much  one  of  distribution,  for  8,000 
dealers  spread  over  the  medium-sized  towns  of  the  United 
States  afford  us  fairly  good  distribution. 

What  to  do  to  cut  down  the  rising  cost  of  advertising  and  sell- 
ing without  taking  that  cost  from  quality  or  retailer's  profit 
is  the  problem  we  have  to  contend  with. 

The  answer  to  a  considerable  extent  is  efficiency,  or  the  elimi- 
nation of  waste,  coupling  selling  and  advertising  forces — a  clearer 
understanding  by  all  parties  as  to  how  far  the  manufacturer 
can  go,  how  far  the  retailer  should  expect  the  manufacturer  to 
go,  how  far  the  manufacturer  wants  the  retailer  to  go,  and  how 
far  the  retailer  must  go  in  order  to  reach  at  least  cost  with  great- 
est ejQSciency  the  final  count — the  consumer. 

The  key  to  the  situation  so  far  as  the  older  types  of  dealer 
helps  are  concerned  is  in  the  degree  of  helpfulness  to  the  dealer 
possessed  by  the  material  sent  out  from  the  manufacturer. 
In  the  same  series  of  articles  on  "dealer  helps"  already  quoted 
there  occurs  the  following  passage,  which  sums  up  in  compact 
form  the  central  idea  which  seems  to  be  developing  out  oi  the 
manufacturer's  studies  of  the  purpose  and  value  of  dealer  help : 

*But  perhaps  the  greatest  factor  in  making  sure  material  is 
used  is  to  get  up  the  right  kind  of  material  to  start  with.  The 
H.  Black  Company  seems  to  have  pretty  nearly  the  right  idea. 
"The  helps  must  be  prepared,"  states  this  company  from  its 
experience,  "so  that  to  the  consumer,  the  ultimate  buyer,  they 
will  look  like  material  originated,  designed,  written,  ordered, 
and  paid  for  by  the  dealer.  The  average  dealer's  own  copy  con- 
tains a  great  deal  of  favorable  mention  of  his  store's  facilities, 
service,  buying  judgment,  etc. — and  quite  properly  And  it  also 
contains  reference  to  the  consumer  and  needs  of  the  consumer, 
also  quite  properly.  So  it  follows  that  advertising  matter  sent 
from  the  manufacturer  to  the  merchant  should  take  into  account 
the  dealer's  natural  pride  and  customers'  needs."  Or,  to  make 
the  same  point  m  another  way.  we  might  take  a  paragraph  from 
a  letter  from  the  H.  W.  Gossard  Co.:  "We  find  the  dealers  only 

^PrifOers"  Ink,  December  10,  1911,  p.  70, 


t< 


DEALER  HELPS" 


1«7 


too  glad  to  co-operate  with  us,  provided  we  study  their  problems 
first-hand  and  not  at  the  desk." 


The  newer  idea  of  dealer  help  goes  one  step  further  than  the 
direct  help  obtainable  from  the  cards  or  other  displays  furnished 
by  the  manufacturer.  The  central  feature  of  this  idea  is  that 
whatever  makes  the  merchant  a  better  merchant  makes  him  a  bet- 
ter distributor  of  the  manufacturer's  product,  and  the  emphasis, 
therefore,  is  centred  not  upon  direct  stimulation  of  sales  for 
the  manufacturer's  own  goods  so  much  as  upon  anything  that 
will  make  the  retailer  a  better  merchant.  Some  phases  of  this 
idea  as  they  bear  upon  increasing  costs  will  be  discussed  in  the 
following  chapter.  But  at  this  point  it  may  be  well  to  look 
at  one  or  two  methods  which  have  been  employed  with  success 
in  educating  the  retailer's  sales  force  as  a  form  of  dealer  help. 
R.  E.  Fowler  describes  as  follows  the  correspondence  course  for 
dealers'  clerks  which  has  been  employed  with  success  by  the 
Printz-Biederman  Company  of  Cleveland,  Ohio,  makers  of 
the  Printzess  garments: 

*We,  as  well  as  almost  every  other  manufacturer  who  dis- 
tributes a  trademarked  article  direct  to  the  retailer,  have 
known  for  some  time  that  the  weakest  link  in  our  distribution 
chain  is  the  retailers'  sales  force. 

Our  national  campaign  to  the  consumer,  our  trade-paper 
campaign  to  the  dealer,  our  retail  service  department — all 
might  be  working  to  their  maximum  efficiency,  and  yet  when 
Mrs.  Prospect  stood  face  to  face  with  the  clerk  the  whole  struc- 
ture would  come  tumbling  about  her  ears — and  the  sale  be 
lost,  in  most  cases  simply  because  the  salesperson  had  not  had 
ready  for  immediate  use  the  real  selling  points  of  the  article — 
its  advantages,  its  uses,  its  quality. 

We  established  the  Printzess  Correspondence  Course  of 
retail  salesmanship  because  we  wanted  the  saleslady  or  sales- 
man to  have  something  more  to  say  than  "It  looks  nice  on  you" 
when  she  slipped  a  Printzess  garment  on  a  lady's  shoulders. 

Lost  sales  mean  merchandise  left  in  stock;  and  merchandise 

*Pnnt€ri  Ink,  October  1,  1914,  p.  3. 


I* 


198 


"DEALER  HELPS '^ 


that  wears  a  brand  and  that  is  left  in  stock  looms  up  in  a  buyer  s 
mind  like  a  skyscraper  in  a  community  of  cottages,  for  buyers 
forget  the  merchandise  that  "sold"  but  do  remember  the  mer- 
chandise that  lagged. 

For  years  we  have  l>een  bending  every  effort  toward  the  edu- 
cation of  the  retailers'  sales  force.  We  have  issued  booklet 
after  booklet,  pamphlet  after  pamphlet,  personal  letters  direct 
to  the  clerks,  store  talks  delivered  to  the  entire  sales  force. 

Four  years  ago  we  made  what  we  call  a  demonstration  shell ; 
A  "Dmon-it  shows  just  how  our  garments  are  tailored.     This 

tfro/ton     shell  was  sent  to  all  of  our  dealers  who  made  requisition 

SA^/f     for  it,  and  who  sent  us  the  names  of  their  salespeople. 

To  the  salespeople  we  sent  letters  of  advice  and  suggestion, 
together  with  a  little  booklet  "How  to  Use  the  Printzess  Dem- 
onstration Shell,"  by  this  means  giving  the  salespeople  the 
"Reasons  Why."  This  helped,  but  still  didn't  accomplish  as 
much  as  we  wished  it  to,  and  we  began  reaching  out  for  some- 
thing that  would  go  still  further. 

We  felt  if  it  were  possible  for  us  to  have  a  representative  visit 
each  one  of  our  dealers'  stores  and  organize  and  conduct  a  class  in 
retail  salesmanship  that  we  would  reach  the  goal  we  were  seeking. 

At  one  time  we  thought  seriously  of  doing  just  this  thing,  of 
hiring  some  of  the  trainwl  sales  experts  and  routing  them  over  the 
country  on  an  educational  tour.  But  when  we  had  gone  a  little 
further  into  the  analysis  of  the  subject  we  saw  not  only  how  expen- 
sive such  a  tour  would  be,but  also  how  littlecouldbe  accomplished 
unless  our  experts  could  spend  at  least  a  week  in  each  town. 

With  this  avenue  shut  off  we  naturally  turned  to  the  next 
available  one — ^teaching  by  mail.  After  we  had  convinced  our- 
selves that  such  a  course  would  be  practical,  we  decided  to  ob- 
tain not  only  the  opinion  of  our  retailers  on  the  subject  but  also 
an  idea  of  how  many  would  actually  be  interested  in  such  a 
course  to  the  extent  of  seeing  that  their  clerks  studied  the  lessons 
and  ansicered  the  questions. 

So  we  sent  out  the  following  letter  with  the  return  card  en- 
closed.    It  might  be  well,  right  at  this  point,  to  say  that  it  is 

A  Letter  ^^^  policy  of  our  advertising  department  always  to 
Thai  Started  test  out  our  ucw  idcas  by  getting  in  touch  with  our 
the  Wheels  trade — before  even  any  preliminary  work   is   done. 

Moving  Q^her  than  uncovering  the  original  thought.  If  the 
verdict  is  negative,  into  the  waste  basket  the  idea  goes  and  the 
money  it  might  have  cost  remains  to  the  credit  of  the  depart- 


" DEALER  HELPS" 


129 


n 


ment.    This  policy  has  saved  us  money ;  that  is  the  best  recom- 
mendation we  can  give. 
The  letter  that  was  sent: 

^^Do  you  have  any  trouble  in  getting  your  garment  salespeople  to  telk  your 

merchandise  intelligently?  .       ,^^  ^       ^      „«;„;«„,.„? 

Do  you  feel  that  you  are  getting  100  per  cent,  sales  efficiency? 

Are  vou  selling  a  goodly  percentage  of  the  lookers.     .      ,       ,  . 

m  are  nT^iing  theL  questioiS  out  of  idle  curiosity  but  ^cause  we  be- 
lieve  that  there  is  room  for  a  vast  improvement  m  retail  sales  efficiency. 

We  are  wiUing  to  do  our  part  to  raise  the  standard  of  retail  salesmanship. 
You  can  doTourf  by  reading  this  letter  and  giving  usy  our  reply  on  the  stamped 

''itf^:^iZm^'^ml.r  of  merchants  who  will  co-operate  with  us  we 
will  establish  a  correspondence  course  of  Retail  Garment  Salesmanship-which 
^11  stort  ^th  the  woolens  and  bring  the  students  up  to  and  through  the  actual 

"^This  course  wUl  be  gratis  to  your  garment  department  employees  and  will 
lead  to  a  Printzess  Diploma  of  Salesmanship. 

Your  c^peration  Vill  be  essential  throughout  the  course,  so  if  you  are 
wUli^g  to^perate  and  think  that  such  a  course  could  be  carried  through 
TuSSly  in  Vour  stor^fiU  out  the  enclosed  card  and  mail  it  to  us  at  once. 

Give  us  vour  opinion  whether  favorable  or  not.  r.  „ 

uive  us  your  up  ^^^^  Printz-Bibdebman  Company. 

The  card  that  was  enclosed  in  it: 

Date 

The  Frintz-Biederman  Co.,  Cleveland,  Ohio. 

I  am  willinrto  co-operate  with  you  in  forming  a  corr^ndence  class  of 
salesmanship  m  my  store  and  will  do  all  in  my  power  to  make  it  a  success. 

Name '"'^ 

Address 

The  response  was  gratifying,  merchants  from  all  over  the 
United  States  not  only  signified  their  willmgness,  but  also  their 
enthusiastic  desire  for  something  of  this  nature.  ,  ^    ^, 

With  the  retailers'  co-operation  assured,  we  then  turned  to  the 
actual  task  of  compiling  a  practical  course  of  retail  salesman- 
ship, one  that  would  cover  the  subject,  and  yet  have  enough  hu- 
man interest  to  hold  the  attention  of  the  student  until  the  last 
lesson  was  learned  and  the  last  question  answered. 

A  number  of  experts  familiar  with  the  teaching  of  salespeople 
were  interviewed.  The  writer  listened  to  discourses  on  psy- 
chology  from  some,  and  on  the  best  way  to  keep  a  sales^l  s  hair 
within  bounds  by  others;  but  at  last  the  course  was  written  and 
we  were  ready  to  ofiFer  it  to  our  retailers. 


130 


« 


DEALER  HELPS 


♦> 


We  decided  that  the  average  person  will  take  almost  anything 
you  give  him  and  lose  interest  in  whatever  it  is  as  soon  as  he  re- 
ceives it,  but  if  you  can  bring  him  to  the  point  of  actually  buy- 
ing something,  the  very  fact  of  having  invested  some  money, 
regardless  of  how  Httle  it  may  be,  gives  him  an  entirely  different 
viewpoint.  So  we  decided  to  make  a  charge  of  two  dollars  for  each 
course,  not  by  any  means  to  cover  the  cost,  but  as  an  evidence 
of  good  faith,  and  to  insure  that  the  lessons  would  be  studied. 

We  argued  that  if  the  average  merchant  invests  from  ten 

Why  a    dollars  to  thirty  dollars  in  a  number  of  salesmanship 

Change    courses  for  his  clerks  that  he  is  interested  enough  to 
Was  Made  see  that  his  clerks  study  the  courses. 

The  results  prove  that  we  were  right  in  our  suppositions. 

The  course  as  we  had  had  it  written  covered  the  subject  in  a 
broad  way,  and  only  mentioned  our  product  where  it  was  deemed 
absolutely  necessary,  and  was  really  of  as  much  service  to  a  girl 
selling  dress  goods  as  to  one  in  the  garment  department. 

The  course  consisted  of  sixteen  chapters,  with  sub-headings. 
It  was  issued  in  loose-leaf  form,  and  each  student  was  sent  with 
the  first  lesson  a  suitable  ringed  cover  for  the  permanent  binding 
of  the  lessons. 

When  Lesson  No.  1  went  forward  to  the  clerk  the  questions 
on  Lesson  No.  1  went  to  the  firm  with  the  request  that  when  the 
students  had  familiarized  themselves  with  the  lesson,  the  lesson 
be  taken  up  by  the  firm  and  the  questions  issued;  these  questions 
to  be  answered  and  mailed  to  our  advertising  department  for 
marking,  and  when  we  returned  the  corrected  questions  with 
them  would  go  the  next  lesson. 


t 


MEETING  THE  CUSTOMER 

You  Teach  Yourself— Essentials— Three  Parts  of  a  Sale— TVhat  Study  Is— 
Readmess  for  Business — Confidence  the  Keyword — First  Influences — Bodily 
Carriage— The  Smile— Dress— The  Voice— Its  Influence— The  Tone— Train 
Your  Ear— Formation  of  the  Tone— Lips  Mold  Tone— Lip  Practice— The 
Jaw— The  Tongue— The  Ear  Critic— Tone  Expresses  You—. 

n 

GREETING  THE  CUSTOMER 

Mmd  Meeting  Mind— People  Different— People  Alike— Scientific  Salesman- 
dup-^Mind  Thinks,  Feels,  Wills— Saleswoman  Director— Attention  the  First 
Step  m  Sale— First  Words— Get  Cue  from  Customer— Si^s  of  Choice— Enter 
Into    Madam'i    Thought— The    Looker— Interruptions— Your    Customers— 


ii 


(< 


DEALER  HELPS* 


131 


Individual  Greetings — Poor  Greetings — Question  Not — ^Suggestive  Greetings — 
Size— Color — Attention — First  Step — . 

m 

THE  HISTORY  OF  WOOL  FABRICS 

Interest  Second  Step  in  Sale — Expert  Advice  on  Garments — ^Printzess  All 
Wool — Scouring  Wool — Characteristics  of  Wool — Sorting  Wool — Qualities — 
Woolens  and  Worsteds — Worsted  Processes — Combing — Dyeing — Spinning — 
Yam  Inspection — Woolen  Processes — Weaving — ^The  Loom — Sizing — Burn- 
ing— Blending  Wools — Oiling  Wool — Mending  Cloth — Cleansing  Cloth — . 

IV 

THE  TAILORING  OF  PRINTZESS 

Finishing  Processes — Fulling — Napping — Lustre — ^Final  Touches — ^Por  Mar- 
ket— ^Telling  a  Worsted  from  a  Woolen — Printzess  Career  Begun — Measuring 
Examination — Examination  of  Material — Material  Returned — Sponging — 
Shrinkage  Examination — Pattern  Designing — The  Master  Pattern — First 
Model — Board  of  Critics — Second  Model — Finished  Pattern — What  Our  Care 
Means  to  You — Cutting — Assembling — Tagging — Setting  Together — First  Gar- 
ment Examination — Pressing — Lining,  etc..  Examination  of  Separate  Parts- 
Final  Pressing — Final  Examination — Filed  Records  of  All  Workers — Canvass 
Ideal — Our  Discovery.  Printzess  Plio — Qualities — Printzess  Complete — Seven 
Examinations — . 

V 

THE  SALE 

Two  Tests — ^Profitable  Salesmanship — Printzess  Label — Printzess  Greeting — 
printzess  Name — Interest — Desire  to  Be  of  Service — Signs  of  Interest — Desire 
Third  Step  in  Sale — Decision  Foiulh  Step  in  Sale — Recognize  Desire  and  Get 
Decision — Summary — Wise  Leadership  of  Saleslady — ^Thoughtful  Advice — 
Talking  too  much — Recognize  Steps — Decisive  Attitude  Important — Selling  to 
a  Group — . 

VI 

THE  SELLING  ARGUMENT 

Three  Rules — ^The  Selling  Points — Style — ^Fit — Material — ^Tailoring — Analjrz- 
ing  into  Selling  Points — Values  of  Comparison — Good  Selling  Talk — Price  Not 
Important  as  Such — Value  for  Price  Important — Saleslady  as  a  Teacher — Rule 
for  Attention — ^Article — Slow  Sellers — Steps  for  Promotion — Quick  Sellers — 
Diminish  Alterations — Exclusiveness — Good  Stock  Keeping — ^How  Your  Gar- 
ments Serve  You — . 

vn 

STUDIES  IN  COLOR  AND  LINES 

Color  Effects — Nature  the  Model — ^Nature  Provides  Color  Settings — Color 
Changes — Color  Mental — Gray  Harmonizes — Change  and  Rest — A  Dominant 


■ 


I'i 


132 


<( 


DEALER  HELPS" 


Color— A  Combining  Coloi^-Vividness  in  Touches— Rule  of  Balance— Colors 
as  Neighbors— Successive  Colors— The  Complexion— The  Neck— The  Pink 
and  White  Face— The  Reddish  Face— The  Over-Pink  Face— The  Red-Cheeked 
Brunette— The  Yellowish  Brunette— The  Yello^vish  Skin— The  Red-Cheeked 
Gray  Skin— Match  Eyes  or  Lips— The  Red  Gold  Blonde— The  WTiite  Face— 
The  Uncertain  Skin— Freckles— Gray  or  White  Hair— Rules  of  Lines— Shiny 
Materials— Folds— Colors  Differ  in  Materials— Value  of  Study— Study  of  Cus- 
tomers' Style  of  Individuality— When  and  WTiere  to  Decide—. 

vin 

READING  THE  CT7BTOMER 

Individualities  Differ— Experience  Teaches— Observation  Signs  of  Mind- 
Memorize  iTypes— Curved  Outlines— Amiability— Irritability— Your  Influ- 
ence—Unbelief—Purpose of  Study— Types  of  Will— Combining  Signs— Curved 
and  Straight  Lines— Facial  Expression— How  to  Use  Signs— Ehminate  Your 
Feelings — . 

IX 

THE  SALESWOBfAN 

Study  Yourself- Your  Desire— Opportunity  or  Necessity— Point  of  View- 
Penetrate  the  Surface — Examples— Point  of  View  a  Habit— Success  Grows  by 
Use— What  Habit  Is— Will  Directs  Habit  at  First— The  Pattern  for  Habit- 
Value  of  Right  Pattern— How  to  Change  a  Habit— Password  to  Habit  for 
Saleslady— Examples— Not  Easy  to  Start  Right— Fear  and  Worrj— Direct 
Your  Thoughts— Fear  Is  Negative— How  to  Prevent  Worry  and  Feai— Hope 
Finds  Solution— You  Are  Captain— No  Time  but  Now— Self-Control— Money 
Stored  up  Labor — Dignity  of  Money— The  Money-Maker  and  Money-Saver—. 

X 

SUCX^ESS  HABITS 

The  Emotions — Desire  Inspires  Intellect — Observation — ^The  Senses  De- 
fined-;-Mind  Observes — Reasoning — Memory— Personal  Memory — Promises — 
Imagination — Accuracy — Things  Mental  First— Example— Opportunities— Im- 
agination in  Speech— Truth— Judgment— Tact— Judgment  in  Tact— Tact  as 
Bluff — Tact  Uses  Memory  and  Imagination — Virtues  of  Tact — Free  Self — 
Three  Ways  for  Tact— Language — Your  Word  Wardrobe — Word  Variety- 
Worn  Words — ^Extravagance— Slang — . 


Each  lesson  was  to  be  given  a  standing,  and  this  class  stand- 

g^^      ing,  taken  into  consideration  wiUi  the  answers  of  20  fi- 

Standing  nal  examination  questions,  determined  whether  or  not 

of  Clerh  the  students  had  maintained  an  average  of  over  75  per 

'^''^'.^*^  cent,  and  were  eligible  for  their  Printzess  Diploma  in 

""  Retail  Garment  Salesmanship. 

Some  time  had  now  elapsed  between  the  receipt  of  the  cards 
expressing  interest  and  the  date  that  we  were  actually  ready  to 


"DEALER  HELPS" 


133 


issue  the  course,  so  the  following  letter,  with  enclosure  and  order 
blank,  was  sent  out: 

Dear  Sir: 

Some  months  ago,  in  response  to  a  letter  which  we  wrote  you,  you  told  us 
that  you  would  be  willing  to  co-operate  with  us  in  establishing  a  course  of 
retail  garment  salesmanship  in  your  store.  This  course  is  now  ready  for  dis- 
tribution, and  if  you  will  read  the  multigraphed  sheet  enclosed  it  will  give  you 
a  general  idea  of  how  carefully  we  have  compiled  it. 

We  are  enclosing  an  order  blank,  and  hope  that  you  will  make  use  of  it, 
letting  us  know  at  once  how  many  of  your  clerks  you  wish  to  have  take  ad- 
vantage of  this  course.  We  ask  thb  so  that  we  may  be  supplied  with  advance 
information  so  that  we  may  know  just  how  many  of  these  courses  to  compile 
and  have  them  ready  for  delivery. 

The  Pbintzess-Biederman  Company. 


A 


The  multigraphed  sheet,  signed  by  our  firm  name,  was  en- 
closed as  follows: 

"We  have  realized  for  years  that  if  we  could  assist  the  re- 
tailer in  making  his  sales  force  more  competent  that  we  would 
be  strengthening  what  we  all  agree  is  the  weakest  link  in  the 
chain  of  modem  merchandising.  This  knowledge  and  desire 
led  us  to  have  prepared  a  sixteen-lesson  course  in  retail-garment 
salesmanship,  which  we  now  offer  to  the  salespeople  of  our  cus- 
tomers. 

"You  can  readily  see  that  in  offering  you  this  correspondence 
course  of  retail  salesmanship  we  are  placing  at  your  disposal  one 
of  the  most  progressive  steps  that  any  manufacturer  has  at- 
tempted in  co-operation  with  the  retailer  and  that  we  are  offer- 
ing you  the  knowledge,  advice,  and  suggestions  of  experts  whose 
services,  if  you  were  to  engage  them,  would  cost  you  thousands 
of  dollars. 

"The  course  will  take  up  in  detail,  but  in  an  easy,  chatty  way, 
the  fundamentals  of  woolens,  garment  construction  and  gar- 
ment salesmanship,  as  well  as  the  proper  decoration  of  the  gar- 
ment department. 

"Examination  questions  will  be  asked  on  each  lesson,  and 
corrected  and  returned  to  the  student.  At  the  close  of  the 
course  a  final  examination  will  be  held,  and  all  of  the  students 
who  pass  this  final  examination  with  an  average  of  75  per  cent, 
or  better  will  be  presented  with  a  Printzess  Diploma  of  Garment 
Salesmanship. 

"This  course,  if  offered  for  sale,  would  readily  command  a  high 
price;  but  we  will  gladly  shoulder  the  expense  of  its  preparation 


'i 


M 


134 


« 


DEALER  HELPS 


*f 


P 


I 


h 


if  our  retailers  will  in  turn  see  that  their  salespeople  give  it  the 
proper  attention;  and,  to  insure  this  attention,  we  ask  a  fee  of 
$2  for  each  student,  payable  by  the  firm  he  represents.  This 
charge  of  $2  will  by  no  means  cover  the  necessary  expense  per 
student  of  postage,  leaflets,  binders,  and  lessons  that  we  will  in- 
cur, to  say  nothing  of  the  heavy  initial  expense  of  compiling, 
editing,  and  printing  the  course;  but  the  charge  is  made  to  se- 
cure, in  so  far  as  possible,  a  pledge  of  genuine  interest." 

The  results  were  gratifying.  Stores  from  one  end  of  the  coun- 
try to  the  other  replied.  Big  department  stores,  which  main- 
tain their  own  system  of  schooUng,  and  Uttle  stores,  tucked  away 
in  the  edge  of  nowhere,  entered  their  clerks  in  the  course;  and 
what  seems  a  good  deal  better  to  my  mind  than  the  first  flush  of 
enthusiasm  with  which  the  idea  was  greeted  is  the  fact  that  we 
began  signing  diplomas  some  time  ago  and  are  still  at  it. 

In  lines  where  personal  and  somewhat  expert  service  is  nee* 
essary  in  selling  there  are  rather  large  possibilities  for  training 
the  retailer's  sales  force.  H.  W.  Gossard,  President  of  the  H. 
W.  Gossard  Company  of  Chicago,  manufacturers  of  corsets, 
describes  as  follows  the  methods  which  his  concern  have  em- 
ployed in  this  type  of  work: 

*In  the  long  run  it  is  more  economical  to  indicate  to  your  deal- 
ers fu)w  to  sell  your  goods  than  it  is  to  try  to  argue  or  cajole,  or 
drive  them  into  doing  so.  This  is  particularly  true  if  the  prod- 
uct is  one  on  which  the  public  needs  education.  The  real 
question  turns  on  how  to  show  the  dealer  and  how  far  to  go  in 
helping  him. 

One  of  our  travelling  saleswomen  will  sell  a  dealer  a  bill  of 
goods  and  after  they  have  arrived  will  dispose  of  the  greatest 
part  of  this  initial  stock  in  two  or  three  days.  She  will,  if  the 
merchant  wants  her  to  do  so,  reorganize  his  corset  department, 
adding  our  high-priced  nationally  advertised  numbers  that  give 
the  merchant  a  better  profit  than  the  low-priced  lines  do,  and 
will  train  his  saleswomen  in  the  fitting  and  selling  of  our  corsets. 

It  is  necessary  to  continue  the  training  of  the  store  sales- 
women by  mail  and  we  publish  a  house-organ  largely  for  this 
purpose.     We  also  devote  a  good  deal  of  attention  at  our  home 

*Prini0rs*  Ink,  January  29,  1914.  p.  S. 


** DEALER  HELPS" 


135 


office  to  the  instruction  of  women  who  come  to  us  for  personal 
training  in  Chicago. 

This  is  expensive,  but  on  the  other  side  of  the  balance  sheet 
are  the  following  advantages:  We  actually  sell  the  goods,  dis- 
pose of  the  dealer's  stock,  and  book  a  duplicate  order.  We 
show  him  that  high-priced  corsets  actually  can  be  sold;  we 
teach  one  or  two  of  his  saleswomen  how  to  sell  them,  and  in  this 
way,  and  by  means  of  our  house-organ,  we  lay  the  foundation 
for  close  relations  with  the  dealers  and  their  saleswomen.  The 
saleswomen  in  the  stores  become  almost  as  much  a  part  of  our 
organization  as  our  own  saleswomen  are.  The  relations  are 
quite  close  when  we  train  them  in  Chicago  and  supply  them  to 
dealers.  Lastly,  we  must  not  overlook  the  local  advertising 
the  dealer  does  in  connection  with  these  demonstration  sales 
and  at  other  times  as  a  result  of  our  co-oj>eration  and  the  im- 
portant consequences  to  us  that  flow  from  building  up  a  first- 
class  corset  department  in  his  store.     Our  dealers  are  our  friends. 

"We  have  at  last  made  the  corset  department  pay  better  than 
any  other,"  is  the  statement  of  many  dealers.  Wherever  our 
Made  Cor-  corsetiere  saleswomen  have  been  we  hear  such  things, 
ad  Depart'  and  now  that  we  are  bettering  our  written  instructions 
ment  Pay  and  getting  them  on  a  more  practical  basis  we  are  se- 
Best  curing  similar  results  and  testimonials  f romjdealers  who 
bought  and  stocked  as  a  result  of  our  advertising  and  not  of  the 
saleswomen's  helps. 

The  special  training  of  the  corsetieres  was  an  absolute  ne- 
cessity.    We  could  have  done  nothing  without  it. 

"There  are  just  two  trades  in  the  store — gloves  and  corsets," 
a  New  York  department  store  man  told  us  the  other  day. 
"Everything  else  just  fills  in.  We  could  transfer  any  other 
clerks  from  one  department  to  another  without  its  making  any 
particular  difference.  After  they  had  learned  the  prices  they 
would  be  just  as  good  in  one  place  as  they  would  in  another,  but 
we  could  not  transfer  them  to  the  corset  or  glove  departments. 
The  young  women  who  fit  gloves  and  corsets  must  know  their 
business,  and  good  ones  do." 

When  we  first  began  to  do  business  a  dozen  years  ago  the 
average  sale  price  for  any  kind  of  corset  on  the  market  was  about 
$1.50.  Practically  everything  above  $3.00  was  sold  to  order 
from  measurements.  There  were  no  extensive  lines,  and  the 
attention  they  got  from  either  the  public  or  the  store  was  com- 
paratively small  in  comparison  with  what  is  given  to-day. 


I 


•^ 


136 


tt 


DEALER  HELPS" 


I 


I 


Improved  designing  and  advertising  has  changed  all  that. 
Our  dealers,  at  least,  have  now  come  to  realize  that  high-priced 
corsets,  such  as  $5,  $6.50,  $8.50,  $10,  and  $15,  and  up- 
ward, can  be  sold  from  stock,  and  there  is  a  larger  net  profit 
from  the  corset  department  than  from  any  other  department 
m  their  stores. 

That  is  one  of  our  most  constant  representations  to  them. 
Our  greatest  effort,  we  point  out,  is  to  raise  the  average  retail 
sale  price  of  corsets  in  their  department.    There  is  a  solid  busi- 
ness reason  for  this  aside  from  giving  the  dealer  a  profit  that 
will  assure  his  interest  in  the  line.     Corset-making  is  a  science 
and  corset-fitting  an  art,  and  both  of  these  cost  something  to 
support;  they  cannot  be  done  on  nothing;  but  the  net  result 
of  doing  both  right  is  that  everybody  is  satisfied.    The  cus- 
tomer cheerfully  pays  the  higher  price  for  better  corsets  and 
comes  back  for  more.     We  could  not  possibly  give  this  satisfac- 
tion if  we  reduced  our  own  or  the  dealer's  profit.    There  is  no 
place  m  our  policy  for  "skinnmg  or  shaving'*  in  either  material 
or   workmanship.     We   count   such   practices   as   commercial 
cowardice  and  regard  their  indulgence  as  a  confession  of  in- 
competent salesmanship.     It  is  encouraging  to  note  a  whole- 
some tendency  toward  honesty  in  merchandise,  and  it  is  believed 
manufacturers  generally  are  beginning  to  recognize  the  value 
of  a  standard  unalterably  maintained — a  pride  mark — a  jus- 
tified price,  real  advertising  and  salesmanship  to  move  the  goods. 
More  explanation  is  necessary,  more  eflSciency  required,  etc., 
but  when  we  sell  corsets  to  a  dealer,  they  stay  sold  and  he  will 
go  to  some  little  personal  expense  to  acquaint  the  public  with 
the  character  of  the  merchandise.     The  higher-priced  corset 
brings  a  higher  class  of  trade  to  his  store  and  the  careful  fitting 
and  personal  service  please  customers  and  other  departments 
of  the  store  profit  in  turn  by  it. 

Our  main  contact  with  the  dealer  is  our  travelling  saleswomen. 

They  are  both  a  sales  force  and  a  teaching  force.     They  open  new 

Corsetieres  accounts,  arrange  corset  department  sales,  reorganize 

Cotdact    the  departments,  pick  out  store  girls  for  local  cor- 
with      setieres  and  train  them,  and  sometimes  visit  physicians 
^'^'^     and  surgeons  to  enlist  their  help.     It  goes  without 
saymg  that  we  could  not  get  this  service  out  of  the  corsetiere- 
saleswomen  unless  they  were  a  picked  body  and  had  been  care- 
fully instructed. 

We  have  three  retail  stores  of  our  own  in  Chicago.    They 


"DEALER  HELPS" 


137 


give  us  an  outlet  into  a  large  i>opulation  centre  and  they  enable 
us  to  keep  our  finger  on  the  public  pulse  and  thus  confirm  our 
interpretation  of  styles,  understand  complaints,  and  generally 
see  things  from  the  outside  of  the  counter.  It  helps  us  to  see 
things  from  the  dealer's  side,  too.  But  one  of  its  greatest  bene- 
fits has  been  in  giving  our  corsetieres  a  practical  training  in 
fitting  and  selling  before  we  send  them  to  our  dealers. 

Our  force  of  travelling  saleswomen  is  now  thoroughly 
grounded  in  everything  that  pertains  to  corsets  and  their  fitting. 
They  have  a  working  knowledge  of  anatomy  and  physiology, 
and  also,  for  special  availability  in  medical  fittings,  some  knowl- 
edge of  such  weaknesses  and  deformities  as  hernia,  corpulence, 
spinal  curvature,  floating  kidney,  enteroptosis,  post-partum, 
gastroptosis,  etc. 

They  must  also  be  informed  in  regard  to  the  demands  of 
fashion,  and  receive  instruction  in  the  elements  of  selling  in- 
cluding skill  in  reading  character. 

These  acquirements  are  indispensable  to  our  saleswomen,  who, 
as  may  be  seen,  fill  a  responsible  place  in  our  organization,  play- 
ing the  triple  r6le  of  travelling  saleswomen,  corsetieres,  and 
teachers.  Even  this  does  not  fully  describe  their  function. 
There  is  something  of  the  manager  and  organizer  in  each  one  of 
them. 

The  corsetieres  are  not  an  evolution  of  a  previous  sales  force. 
They  really  represent  a  revolution  in  sales  method.  In  fact, 
our  business  has  been  a  series  of  revolutions.  We  were  originally 
a  wholesale  house  selling  dressmakers'  supplies  to  the  trade  and 
engaged  in  the  corset  business  almost  by  accident. 

It  was  about  twelve  years  ago  that  our  Paris  buyer,  when  over 
here,  suggested  that  it  would  be  good  for  us  to  add  a  French 
corset  to  our  line  of  gowns,  trimmings,  and  laces.  I  thought  well 
of  the  idea,  and  on  my  next  trip  to  Paris  made  it  a  point  to  look 
around.  Of  the  corsets  I  saw,  I  was  most  impressed  by  one  in 
the  Bon  Marche,  a  high-priced  corset  with  the  unique — at  that 
time — ^feature  of  front  lacing.  It  was  called  "L'Irresistible," 
and  I  learned  from  the  mani3acturer,  whom  I  found  in  spite  of 
obstacles  thrown  in  my  way  by  uncommunicative  tradesmen, 
that  it  was  the  joint  invention  of  a  countess  who  also  was  a 
famous  artist,  and  a  well-known  dressmaker.  The  demand 
for  it,  though  exclusive,  was  very  small,  and  the  manufacturer 
was  open  to  a  proposition.  I  closed  the  transaction  at 
once. 


\ 


11 


I  ii 


'l"l 


138 


i* 


DEALER  HELPS" 


We  arranged  for  an  initial  importation  of  twelve  and  a  half 
dozen.  The  retail  price  of  the  corset  was  to  be  $25.  If  I  had 
known  anything  about  the  corset  business  of  that  day,  I  prob- 
ably would  never  have  ventured  on  such  an  undertaking. 
The  average  price  of  a  corset  was  probably  one  dollar.  Five 
dollars  was  a  high  price.  And  I  had  undertaken  to  sell  a  corset 
at  $25 !  But,  not  knowing  the  situation,  I  mshed  in  where  most 
experienced  corset  men  would  have  feared  to  tread.  We  were 
saved  only  by  our  selling  agencies.  If  they  had  been  any  other 
than  the  highest  class  of  dressmakers  in  the  country,  we  prob- 
ably would  not  have  succeeded.  Nobody  else,  I  believe,  could 
have  pulled  the  proposition  through. 

It  was  done,  however,  and  done,  all  things  considered,  with 
astonishing  rapidity.  The  secret  was  in  the  front  lacing,  which 
not  only  made  it  much  easier  for  the  wearer  to  put  on  the  cor- 
set, but  gave  a  degree  of  comfort  which  we  can  only  assume, 
from  the  large  sales  at  our  high  prices,  had  been  before  un- 
known. 

One  of  the  largest  elements  in  the  high  price  was  the  60  per 
cent,  customs  duty  on  corsets.  We  at  length  decided  to  manu- 
facture them  on  this  side  of  the  water.  Our  first  product  was 
crude,  but  we  soon  overcame  the  manufacturing  diflficulties 
and  have  since  gone  on  improving  the  garment  and  increasing 
the  output  and  our  factory  facilities.  This  made  it  possible 
to  extend  our  line.  We  now  have  corsets  ranging  all  the  way 
from  $40  to  $2,  the  lowest  price  being  the  most  recent 
addition. 

As  our  business  continued  to  expand  we  found  it  necessary 
to  make  the  indicated  change  from  a  selling  organization  of 
dressmakers  to  drj^goods  stores.  We  did  not  drop  the  old 
organization  all  at  once;  in  fact,  we  have  some  of  the  old  repre- 
sentatives in  many  parts  of  the  country. 

It  had  not  been  diflScult  for  the  fashionable  dressmaker  to 
induce  her  patron  to  buy  a  high-priced  corset  as  a  means  of  get- 
ting a  better  fit  for  her  high-priced  dress.  This  was  the  chief 
appeal  of  the  dressmaker.  When  we  changed  over  to  the  stores, 
we  lost  a  good  deal  of  the  power  ot  that  method.  Usually  the 
saleswomen  did  not  have  the  influence  with  the  customer  that 
the  fashionable  dressmaker  had.  So  it  became  necessary  to 
supplement  this  appeal  with  another.  We  began  to  analyze 
the  corset  proposition  more  closely  than  we  had  ever  had  any 
occasion  before  for  doing. 


<( 


DEALER  HELPS" 


139 


Corsets  are  two  parts  necessity  and  one  part  fashion.  We 
could,  and  did,  put  in  a  strong  word  for  them  as  the  embodiment 

Corsets  of  fashion  in  corsets.  Necessity,  we  had  not  gone 
and      so  strong  on.     Convenience,  yes,  and  comfort.     Why 

Doctors  j^qi  health?  The  medical  profession  was,  as  a  whole, 
very  pessimistic  on  the  subject  of  corsets.  Since  practically 
all  women  continued  to  wear  them,  it  had  been  the  fashion 
to  ignore  the  doctors  as  factors  in  the  corset  business.  Was  this 
good  business .f*  We  were  not  satisfied  that  it  was.  Women 
might  wear  corsets,  doctors  or  no  doctors,  but  unquestionably 
few  women  gave  the  attention  to  corsets  that  they  should,  and 
the  right  kind  of  attention.  Thousands  of  them  unquestionably 
were  wearing  cheap,  ill-fitting,  injurious  shapes  when  they  could, 
by  paying  a  little  more,  get  something  that  would  be  positively 
beneficial. 

We  knew  that  the  corset  had  been  maligned.  We  knew  from 
experience  that  all  corsets  were  not  bad,  but  only  those  which 
were  ill-fitting,  which  bind  where  there  should  be  no  pressure, 
and  fail  to  give  support  where  it  is  needed.  Physiological  com- 
fort had  been  taken  into  account  by  the  original  designers  of 
"  LTrresistible "  and  we  had  followed  the  lead,  but  now  we 
went  into  the  question  with  great  thoroughness,  consulting  medi- 
cal literature  and  some  of  the  leading  men  in  the  medical  pro- 
fession, hospital  surgeons  and  specialists. 

When  it  was  at  length  evident  that  a  growing  number  of  the 
physicians  were  not  only  approving  our  efforts  to  follow  scientific 
principles  in  the  construction  of  our  corsets,  but  were  actually 
prescribing  them  in  hernia,  spinal  curvature,  and  post-operative 
cases,  we  saw  the  great  possibilities  of  securing  the  moral  sup- 
port of  the  profession.  We  prepared  special  literature  for  dis- 
tribution to  the  doctors.  Oiu*  corsetieres  made  it  a  point  to  call 
on  leading  specialists  in  the  cities  they  visited  and  direct  the 
matter  personally  to  their  attention. 

This  led  to  a  change  of  view  on  the  part  of  many  physicians 
and  to  actual  prescriptions  of  our  corset  in  medical  cases.  This 
professional  support  was  especially  valuable  when  a  two  or  three 
days*  Gossard  sale  was  being  held  in  a  town.  The  use  of  the 
doctor's  name  and  his  endorsement  went  a  long  way  toward  in- 
spiring confidence. 

You  observe  that  the  actual  work  of  interesting  the  doctor, 
or  most  of  the  work,  is  done  by  the  corsetiere.  She  comes  into 
the  town,  inter\news  the  dealer,  sells  him  a  bill  of  goods.    He 


140 


"DEALER  HELPS" 


ma 


i 


must  do  something  to  get  the  people  into  the  store.  She  will 
supply  him  w^th  electrotypes  and  copy  for  the  local  paper  and 
suggestions  for  a  circular  letter  to  the  patrons  of  the  store  who 
are  hkely  to  be  interested,  and  for  a  letter  to  the  physicians. 
Any  physicians  especially  interested  and  influential  she  is  wilhng 
to  call  on. 

And  then  on  a  later  day  she  returns  and  gives  a  demonstration 
sale.     She  helps  arrange  the  stock  and  drills  any  helpers  she 

SeU^  in    needs.     She  then  receives  the  women  who  call,  fitting 

Dealer's    them  with  care  and  making  them  satisfied  and  walking 

.    '^''*'^     advertisements  of  the  Gossard  corset.     With  such 

success  has  this  been  done  that  often  a  woman  who  is  fitted  the 

first  day  returns  the  following  day  with  a  friend  or  two  whom 

she  wants  fitted. 

At  the  end  of  the  second  or  third  day  our  corsetiere  has  sold 
the  stock  and  taken  the  merchant's  re-order.  When  she  moves 
on  she  has  that  department  started  on  the  right  road.  The 
double  demonstration  of  selling  and  teaching  often  impresses 
the  merchant  so  much  that  he  wants  to  make  full-fledged  cor- 
setieres  of  his  best  one  or  two  clerks  and  sends  them  on  to  Chi- 
cago for  a  few  days'  instruction  in  our  stores  and  school.  We 
have  done  this  for  merchants  a  great  many  times.  It  is  a  part 
of  our  service. 

They  do  this  because  they  realize  the  importance  of  trained 
saleswomen  and  corsetieres  in  the  corset  department.  It  makes 
all  the  difference  in  the  world  to  them.  An  experienced  sales- 
woman can  sell  our  high-priced  corsets  by  fitting  and  make  a 
larger  profit  on  each,  and  she  will  satisfy  the  women  who  come 
into  the  Gossard  stores  and  bring  them  back  again. 

The  corsetieres  we  train  and  place  in  retail  stores  are  really 
high-grade  saleswomen  who  can  go  anywhere  and  get  from  $60 
to  $150  a  month. 

We  are  urging  all  the  local  corsetieres  to  study  our  literature 
for  physicians  and  perfect  themselves  in  medical  fitting.  Those 
who  have  done  so  have  been  enabled  to  get  into  touch  with  the 
hospitals  and  fit  many  patients  with  our  corsets  under  phy- 
sician's prescriptions,  often  over  bandages  and  plaster  casts. 
In  the  same  way  they  have  gone  into  private  homes.  This  part 
of  the  work  has  been  developing  step  by  step  with  the  dealer 
co-operation. 

We  have  been  consistent  advertisers  from  the  very  first,  in 
the  dresiimakers'  magazines,  trade  papers,  and  women's  maga- 


«( 


DEALER  HELPS" 


141 


zincs,  with  large  space  copy.  We  have  also  used  several  news- 
papers in  Chicago,  where  our  retail  stores  are  located,  and  news- 
papers in  New  York. 

I  think  we  can  account  our  advertising  second  to  none  in  the 
corset  line,  which  boasts  some  very  fine  advertising.  We  de- 
rive some  advantage  from  the  fact  that  we  are  the  largest  manu- 
facturers of  high-priced  corsets  in  the  world  and  that  our  modes 
are  authoritative  and  are  so  accepted.  When  we  began  to  im- 
port the  front-laced  "L'Irresistible"  corsets,  they  were  the  only 
front-laced  corsets  on  the  market.  To-day  all  but  a  bare  half- 
dozen  of  the  many  corset-makers  have  front-lacing  corsets. 
The  front-lacing  principle  has  won  out,  as  we  knew  it  would, 
because  it  is  aligned  with  progress  and  because  the  front-lacing 
method  is  the  only  logical  one.  I  think  we  may  give  much 
credit  to  advertising  for  the  general  adoption  of  the  front-lacing 
principle. 

Our  position  also  enabled  us  recently  to  make  what  without 

presumption  we  could  fairly  call  a  ** proclamation"  of  the  au- 

The  Proc-  thoritative  corset  styles.     We  issued  these  proclama- 

lamation  tions  in  the  spring  and  fall.     We  arranged  in  con- 

of  Style  nection  with  them  "proclamation  weeks."  We  fol- 
lowed the  announcements  up  with  the  ads  giving  samples  of  the 
new  models  of  our  corsets.  The  models  were  electrotyped  for 
the  dealers  and  the  dealers  ran  the  cuts  in  their  local  papers  and 
direct  advertising.  This  "proclamation"  advertising  has  been 
among  the  most  successful  that  we  have  done. 

The  basic  note  of  our  trade-paper  copy  is  that  we  extend 
privilege  to  the  dealer  when  we  let  him  sell  our  goods.  W^e  say 
this  good-humoredly,  but  earnestly,  and  he  knows  it  is  so.  We 
see  to  it  that  he  ha^  been  convinced  by  the  merit  of  the  corset. 

One  of  the  most  important  forms  of  advertising  that  we  do  is 
for  the  education  and  stimulation  of  our  sales  force,  both  those 
actually  on  our  payroU,  travelling  on  the  road,  and  those  also  in 
the  dealers'  stores,  who  are  specializing  on  our  corsets  and  whose 
interest  in  everything  pertaining  to  sales  promotion  we  endeavor 
to  satisfy.  We  do  this  by  means  of  our  Gossard  CorsetierCy  a 
house-organ  of  24  pages,  with  cover.  This  is  a  practical  little 
magazine,  reproducing  our  advertising,  discussing  the  new 
models,  following  up  the  sales  talks,  giving  helpful  hints  about 
personal  appearance,  and  just  now  conducting  a  discussion  on 
how  to  read  character.  There  are  in  it  also  hints  for  the  ad- 
vertising man,  ideas  for   window   display,   and   like   matter. 


w 


;  If 


it' 


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a 


I 


P  i' 


14£ 


"DEALER  HELPS'* 


Among  the  most  interesting  things  in  the  book  are  the  testi- 
monials and  anecdotes  reprinted  from  letters  received  from  wear- 
ers of  the  corsets,  many  of  them  former  hospital  patients. 

We  are  adopting  a  new  advertising  policy  for  next  season. 
Up  to  this  time  we  have  rung  the  changes  on  the  superior  value 
of  the  front-laced  corsets  and  we  have  converted  the  public — 
including  our  competitors.  We  are  now  ready  to  take  the  next 
educational  step.  We  shall  point  out  that  having  established 
the  comfort  and  hygiene  of  the  front-laced  corset,  we  can  now 
go  on  to  the  not  less  important  point,  that  an  equal  value  of  the 
corset  is  in  the  design. 

It  is  by  such  advertising  that  we  are  giving  support  to  our 
corsetiere  saleswomen  on  the  road,  our  dealer  agents,  and  their 
local  corsetieres.  The  three  must  work  in  harmony  to  get  the 
best  results.  The  best  evidence  that  they  do  is  the  growth  of 
the  business. 

(3)  USES  OF  DEALER  HELPS 

Quite  as  important  as  the  nature  of  dealer  helps  is  the  way 
they  are  used.  A  series  of  five  articles  which  appeared  in  Printers* 
Ink  in  the  fall  of  1914,  covering  the  dealer  help  situation  as  it 
then  existed,  gives  almost  as  much  attention  to  the  uses  of  dealer 
help  as  to  its  forms.  *The  following  paragraphs  are  taken  from 
the  third  article  in  this  series  and  illustrate  the  importance 
which  is  attached  by  retailers  to  the  methods  used  in  getting 
out  dealer  helps: 

tOrdinarily  one  thinks  of  dealer  "helps"  as  supplementary 
to  national  advertising.  To  reverse  this  and  say  that  there 
are  advertisers  this  season  who  are  making  their  advertising 
supplementary  to  their  dealer  helps  might  appear  startling. 
Yet  it  is  so. 

These  advertisers  have  discovered  that  the  old  cry  of  "hitch 
our  trademark  to  your  store"  is  losing  its  influence.  Dealers 
seem  to  feel  that  advertisers  have  grown  fond — i>erhaps  too  fond 
— of  saying:  "Use  these  electros  in  your  newspapers,  put  this 

*Priniers'  Ink,  October  22,  1914,  p.  17;  November  5,  1914,  p.  33;  November 
19.  1914,  p.  12;  December  10,  1914,  p.  67;  December  17,  1914.  p.  CO. 

fPrinter*'  Ink,  November  19,  1914,  p.  12. 


c< 


DEALER  HELPS" 


143 


display  in  your  window,  distribute  these  booklets  in  your  bun- 
dles, so  that  the  buyers  in  your  town  will  know  that  your  store 
is  the  *Home  of  Wear-forever  Clothing.'"  So  they  have  tried 
to  circumvent  the  condition  by  building  the  campaign  upon  the 
"helps";  that  is,  advertised  helps  in  the  newspapers,  trade  pa- 
pers, outdoor  displays,  and  magazines. 

Isn't  dealer  material  so  advertised  likely  to  enjoy  preferred 
position  and  preferred  use.^  It  would  seem  so.  Such  "helps" 
have  a  value  in  the  eyes  of  the  dealer,  greater  than  that  of  the 
material  itself. 

Like  a  good  many  other  sound  ideas  that  are  in  evidence  this 
fall,  this  plan  originated  in  the  clothing  field.  But  it  is  spreading 
to  other  fields,  and  for  a  reason.  "We  get  great  quantities  of 
dealer  material,"  said  an  alert  clothier,  just  out  of  Philadelphia, 
"but  nothing  that  gives  us  as  much  benefit  as  the  material  sent 
out  by  Hart,  Schaffner  &  Marx. "  And  you  can  go  into  any  up-to- 
date  clothing  store  and  you  will  be  told  the  same  thing.  Dealers 
swear  by  this  company's  style  book  and  store  material.     Why? 

Because  Hart,  Schaffner  &  Marx  send  out  material  that  is 
a  credit  to  the  merchant's  store,  material  which  people  will  come 
into  the  store  to  ask  for.  "I  have  sold  a  good  many  dollars* 
worth  of  goods  this  fall,"  said  a  Newark,  N.  J.,  clothier  to  a 
Printers*  Ink  staff  man  who  was  making  inquiries,  "by  putting 
the  Hart,  Schaffner  &  Marx  *  dancing  couple'  (one  of  the  fall 
window-cards)  in  our  windows  with  a  little  card.  This  card 
says  that  if  any  one  wants  a  copy  of  the  poster,  to  come  into  the 
store.  It  proves  that  people  who  hang  posters  in  their  dens  like 
it,  for  several  score  of  men  have  come  in  to  ask  for  copies. 
Seldom  do  they  go  out  without  buying  something." 

But  the  real  reason  for  the  popularity  of  Hart,  Schaffner  & 
Marx  dealer  "helps"  appears  in  this  statement,  made  to 
Printers*  Ink  by  Joseph  Schaffner,  secretary  of  the  company: 
"It  is  not  so  much  because  we  understand  the  dealers'  needs," 
said  Mr.  Schaffner,  "that  we  have  been  successful  in  getting 
their  co-of)eration,  but  rather  because  we  give  our  material  a  vahie 
in  the  eyes  of  the  dealer  other  than  the  value  of  the  material  itself. 

"Unless  we  advertised  persistently  and  effectively  we  could 
not  expect  one  fiftieth  as  much  service  from  our  dealer  litera- 

Joseph     ture.      The  advertiser   who  expects  the   most   from 

Schaffner  dealer  hterature  is  the  in-and-outer  who  advertises  to- 

Explains  ^j^y  and  immediately  tries  to  make  his  dealers  believe 

he  has  tapped  the  springs  of  continuous  demand.    This  form  of 


j 


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* 
* 


144 


C( 


DEALER  HELPS  ' 


deception  is  wry  common.     The  next  year  his  courage  fails  or 
pocketbook  rebels  and  he  drops  out. 

**The  mistake  is  a  grievous  one  because  it  amounts  practically 
to  a  request  to  the  dealer  to  advertise  for  the  purpose  of  aiding 
the  manufacturer,  whereas  what  the  dealer  wants  is  something 
that  will  aid  him.  The  thing  he  can  and  does  advertise  is  the 
article  which  means  something  to  him,  to  his  salesmen,  and  the 
public. 

"Here  is  a  case  in  point:  We  publish  a  style  book  for  the  use 
of  our  customers.  It  is  a  good  thing  in  itself,  but  we  have  multi- 
plied its  value  to  the  dealer  many  times  over  by  giving  it  na- 
tional publicity.  We  have  spent  thousands  to  advertise  that 
piece  of  dealer  literature  and  have  made  it  so  well  known  to  the 
public^  that  it  becomes  an  almost  indispensable  part  of  the 
dealer's  campaign.*' 

In  other  words,  by  exploiting  a  dealer  help  locally  in  the  news- 
papers, street-cars,  or  by  outdoor  displays  people  are  brought 
to  the  dealer's  store.  The  advertising  immediately  becomes  an 
immense  aid  to  the  dealer,  not  only  because  its  contents  sell  the 
goods  he  has  on  his  shelves,  but  it  actually  gets  people  into  his 
store. 

One  dealer  said,  when  asked  why  he  gave  the  Hart,  Schaffner 
&  Marx  window-card  such  prominence  in  his  store:  "Because 
they  advertise  in  the  newspapers  that  merchants  who  sell  Hart, 
Schaffner  k  Marx  clothes  can  be  quickly  found  because  they 
have  this  picture  in  their  window— and  the  ad  is  illustrated  with 
a  cut  of  the  window-card.  I  would  be  a  chump  if  I  didn't  put 
it  up,  wouldn't  I?"     .         .  * 

This  series  of  articles  on  dealer  helps  brought  out  from 
Joseph  Katz  of  the  Hub,  Baltimore,  Md.,  the  following  discus- 
sion of  dealer  helps  ^Titten  from  the  retailer's  point  of  view. 
The  centre  of  ^Ir.  Katz's  conclusions  seems  to  be  that  dealer 
helps  which  really  assume  the  dealer's  point  of  view  are  the  only 
ones  which  have  any  chance  of  bringing  satisfactory  results: 

♦Manufacturers  who  have  read  the  series  of  five  articles  on 
dealer  helps  in  Printers*  Ink  recently  have  undoubtedly  found 
much  in  them  in  the  nature  of  a  surprise. 

*Fnnteri  Ink,  Januaiy  7,  1915.  p.  57. 


(I 


DEALER  HELPS" 


145 


Those  who  read  between  the  lines  could  not  help  but  note  a 
growing  resentment  of  the  type  of  dealer  help  that  makes  no 
allowance  for  the  individuality  of  the  dealer. 

The  big  town  was  always  the  hard  town  for  the  manufacturer 
who  wanted  to  put  "Home  of  My  Product"  across  the  dealer's 
door,  on  his  side  wall,  in  every  one  of  his  windows,  and  all  over 
his  newspaj)er  advertising. 

But  Printers'  Ink's  investigation  has  uncovered  my  long-held 
theory  that  the  small-town  merchant  is  changing  his  view- 
point. 

There  is  one  paragraph  in  one  of  the  articles  that*s  worth  its 
weight  in  gold.  In  it  is  found  the  key  to  100  per  cent,  efficiency 
in  getting  dealer  helps  used — and  that  is  this  by  A.  W.  Newman 
of  the  H.  Black  Company:  "The  helps  must  be  prepared," 
states  this  company  from  its  experience,  "so  that  to  the  con- 
sumer, the  ultimate  buyer,  they  will  look  like  material  originated, 
designed,  written,  ordered,  and  paid  for  by  the  dealer.  The 
average  dealer's  own  copy  contains  a  great  deal  of  favorable 
mention  of  his  store's  facilities,  service,  buying  judgment,  etc., — 
and  quite  properly.  So  it  follows  that  advertising  matter  sent 
from  the  manufacturer  to  the  merchant  should  take  into  ac- 
count the  dealer's  natural  pride  and  customers'  needs." 

Read  that  again;  paste  it  in  yom-  hat;  it's  the  key  to  the  en- 
tire situation. 

Let  every  manufacturer  give  this  test  to  his  matter.  How 
many  sets  of  dealer  helps  can  stand  this  test?  Very  few.  I'm 
sure.     I've  seen  very  little  of  such  advertising  matter. 

It's  a  clever  manufacturer  who  knows  the  art  of  putting  the 
dealer  to  work.  The  best  way  to  do  it  is  to  give  the  dealer  a 
place  in  your  argument.  Write  your  ads  and  booklets  as  if 
the  dealers  were  to  sign  them.  Say:  "Our  clothes  are  made  by 
Hart,  Schaffner  &  Marx,"  instead  of,  "Hart,  Schaffner  &  Marx 
clothes  are  the  finest  in  the  world  and  are  sold  by  W.  C.  WTiite." 
Read  this  copy  from  a  folder  furnished  to  dealers  by  the  House  of 
Kuppenheimer: 

In  justice  to  you  as  one  of  this  store's  good  friends,  we  cannot  let  winter 
weather  approach  nearer  without  telling  you  something  about  the  greatest 
overcoat  success  of  the  season — the  Klavicle. 

The  Klavicle — we  say  it  without  reservation  because  it  is  our  conviction — 
is  the  greatest  overcoat  achievement  of  recent  years.  Coming  from  America's 
greatest  overcoat  makers— The  House  of  Kuppenheunei^there  is  nothing  like 
it  to  be  found  under  any  other  label-— m  comfort,  in  style,  in  ser\-ice.    It  is 


m 


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146 


«< 


DEALER  HELPS 


» 


cut  on  the  free,  loose  lines  of  a  cavalrjinan's  cape,  full  sleeves  and  back  without 
a  seam;  wide  rolling  lapels;  velvet  collar;  natural  color  buffalo  horn  buttons. 

But  the  look  and  feel  of  the  garment — the  way  it  drapes  upon  your  shoulders — 
will  tell  you  more  about  its  merits  than  anything  we  can  say. 

You  know  us  well  enough  to  be  assured  that  our  welcome  to  you  is  always 
broad  enough  to  show  our  merchandise  at  any  time  you  call  and  leave  the 
question  of  buying  entirely  to  your  judgment. 

The  Hub,  Baltimore  St.  at  Charles. 


The  dealer  is  doing  the  talking  in  the  folder,  even  if  the  marker 
did  furnish  it.  And  the  merchant  is  only  too  glad  to  get  folders 
of  this  character. 

To  write  copy  like  this  a  manufacturer  must  anticipate  how- 
far  a  dealer  will  go  in  talking  about  an  advertised  make  over 
his  own  signature.  It  is  taken  for  granted  that  statements  like 
these  must  be  milder  than  usual. 

Advertising  matter  of  this  character  cashes  in  on  the  local 
reputation  of  the  dealer — the  biggest  kind  of  factor  in  producing 
business.  If  I  may  judge  by  the  way  most  advertising  is 
worded,  few  manufacturers  admit  it,  but  it  is  a  fact  that  manu- 
facturers can  profit  by  the  recommendations  of  their  dealers. 
A  good  dealer  is  a  power  in  his  community,  and  few  articles  are 
so  strong  that  they  can  afford  to  kill  this  individuality  in  the 
dealer's  advertising. 

A  store  wants  to  lead  its  own  life.  Let  the  manufacturer  en- 
courage this  good  quality — it  is  the  hallmark  of  a  good  mer- 
chant. 

The  fact  that  some  dealers  can  be  induced  to  use  almost  any 
kind  of  dealer  helps  doesn't  make  it  right  or  good  business  to 
"put  it  over."  It  is  surprising  to  what  lengths  some  maau- 
facturers  will  go  to  preserve  their  own  individuaUty,  but  they 
don't  care  much  about  the  dealer's  end  of  it. 

A  certain  manufacturer  was  running  a  series  of  advertise- 
ments in  a  Baltimore  paper.  We  tried  to  put  our  signature 
cut  inside  of  the  border,  but  the  newspaper  told  us  it  had  orders 
to  place  a  cut-off  rule  after  the  ad,  and  so  our  name  would  have 
to  be  cut  off  from  that  of  the  manufacturer. 

We  wrote  to  the  makers — these  folks  get  out  unusually  good 
dealer  helps — and  they  replied  they  would  have  to  follow  their 
original  intention  "because  it  will  help  us  to  maintain  the 
natural  character  of  our  newspaper  work." 

Yet  most  manufacturers  don't  hesitate  to  ask  you  to  run 
"manufactxirer-created"  copy — and  even  pay  for  it  yourself. 


« 


DEALER  HELPS" 


147 


Another  big  mistake  to  which  much  waste  is  due  is  in  getting 

up  but  one  set  of  helps.     The  H.  Black  Company  again  has  the 

Analyzing  right  idea.    They  say:  "Small-town  stores  do  things 

Dealers'  differently  and  have  different  facilities  from  the  large- 
Needs  town  stores.  W'e  have  learned  this  lesson  and  we  are 
trying  to  express  it  in  the  work  that  we  do  with  the  dealer  this 
fall." 

Most  manufacturers  make  no  distinction  between  their  cal- 
culations of  the  big  store  in  the  metropolitan  city  and  the  cross- 
roads merchant. 

The  advertising  policy  of  the  big  store  differs  radically  from 
the  small  establishment.  The  big  fellow,  for  example,  rarely 
uses  anything  over  a  five-inch  clothing  cut  in  his  regular  ad- 
vertisements— space  is  too  costly.  Country  paper  space  is 
reckoned  by  the  inch  instead  of  the  line — and  the  larger  cut  is 
often  used.  The  big  storekeeper  doesn't  care  for  a  cut  with 
the  maker's  trademark  plastered  all  over  it.  An  agate  copy- 
right liae  is  his  idea  of  the  maker's.share  in  it. 

A  cut  in  the  paper  is  worth  a  thousand  in  the  cut  cabinet. 
Clever  concerns  like  Hart,  Schaffner  &  Marx,  Kuppenheimer, 
and  the  makers  of  Society  Brand  clothes  long  ago  learned  that 
cuts  with  but  an  agate  copyright  line  are  used  every  time — ^and 
have  for  their  pains  advertisements  in  hundreds  of  towns  paid 
for  by  their  dealers. 

Another  reason  why  so  much  dealer's  material  is  not  used  is 
because  it  does  not  take  into  consideration  that  in  most  cases 
the  dealer  handles  competitive  lines. 

If  a  dealer  handles  half  a  dozen  lines  of  hose  and  each  show-card 
says  "the  best  on  earth,"  how  in  the  world  can  any  sensible 
dealer  put  them  all  up? 

I  believe  that  mamifacturers  have  a  very  hazy  idea  of  how 
much  advertising  the  average  store  does.  Most  dealers  handle 
several  good  lines  of  nearly  everything  they  handle.  They  can 
only  use  a  small  part  of  the  helps  they  receive. 

It  is  also  vitally  important  that  your  matter  reaches  the  right 
man.  Hart,  Schaffner  &  Marx  send  letters  to  every  executive 
so  that  they  all  get  behind  the  campaign.     Here's  one: 

Advertising  Manager, 

The  Hub,  Baltunore.  Md. 
Dear  Sm: 

Advertising  matter  like  the  enclosed  is  going  separately  to  your  concern 
but  we  wish  to  call  your  particular  attention  to  it.    We  believe  you  will  recog- 


i 


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148 


"DEALER  HELPS  ' 


nize  an  opportunity  for  hooking  up  with  our  own  campaign,  and  getting  son  % 
immediate  sales  on  this  full  dress  suit  at  $35. 

Our  own  newspaper  advertisements  will  appear  in  your  city  about  November 
6th.  You  can  learn  the  exact  dates  later  from  the  publishers.  The  copy  will 
be  confined  to  this  one  item — a  full  dress  suit  to  retail  at  $35. 

The  Saturday  Evening  Post  of  November  7th,  Collier's  of  the  same  date,  the 
Literary  Digest  of  the  14th,  and  all  the  December  magazines  will  contain  an- 
nouncements of  this  same  dress  suit. 

The  whole  force  of  the  campaign  is  going  to  centre  on  November.  Wo 
write  you  about  it  in  advance  so  Uiat  you  may  be  fully  prepared  to  get  the 
biggest  possible  benefit. 

Yours  truly, 

Hart,  Schaffner  &  Marx, 

Per  R.  O.,  Advertising  Dept. 

Another  weak  link  with  many  manufacturers  is  not  to  notify 
the  dealer  in  advance  of  advertising  slated  for  his  local  papers. 

Miscel'    More  than  once  we  have  been  surprised  to  see  big 

laneous    announcements  of  goods  we  handle — and  we  were 
Suggestions  not  tipped  off  early  enough  to  enable  us  to  place  our  an- 
nouncement under  them.     This  bad  slip,  I  am  glad  to  say,  is 
rapidly  becoming  obsolete. 

Cut  books  should  be  printed  on  one  side  of  the  paper  in  black 
ink.  This  gives  the  dealer  a  chance  to  make  cuts  any  size 
wanted. 

For  the  larger  stores,  instead  of  books  with  ready-made  ads 
that  are  never  used,  why  not  furnish  a  vest-pocket  afiFair  with 
terse  paragraphs  giving  the  selHng  points  peculiar  to  the  product 
advertised,  for  the  use  of  the  store's  advertising  man? 

Signs  for  windows  should  be  small,  so  as  not  to  interfere  with 
the  display  of  the  merchandise.  Those  in  imitation  of  hand 
lettering  are  particularly  desirable.  Small  brass  signs  are  al- 
ways welcome. 

Writing  dealer  helps  from  the  standpoint  of  the  merchant  is 
also  a  way  to  make  better  dealers.  Don*t  ask  a  merchant  to 
sink  his  individuality — it's  his  most  valuable  asset. 

Interest  yourself  in  the  dealer's  problem.  Give  him  some 
good  general  advice  once  in  a  while. 

Read  this  paragraph  from  a  letter  that  came  with  some  sug 
gested  clearance  ads  from  Hart,  Schaffner  &  Marx: 


This  season,  more  than  ever  before,  try  to  keep  away  from  the  commoii 
clearance-sale  idea  of  sensationalism — "enormous,"  "gigantic"  and  all  that; 
people  seldom  believe  this  sort  of  thing,  anj-way,  so  give  them  the  truth  straight 
from  the  shoulder.     We've  tried  to  do  it  in  these  advertisements. 


« 


DEALER  HELPS" 


149 


Have  the  newspaper  use  light-faced  type,  Caslon  old  style,  if  possible;  you 
want  to  be  sure  to  keep  away  from  the  big,  black,  noisy  type. 

^  Note  the  plain,  homely  style;  it's  the  kind  of  talk  that  wins  a 
dealers  confidence.  Compare  it  with  the  average  bombastic 
form  letter. 

The  maker  whose  helps  don't  "kick  out'*  the  dealer's  own 
personality  is  the  one  who  will  find  most  of  his  material  used. 
And  the  fellow  who  is  all  wrapped  up  in  his  own  importance  ^nlj 
lind  his  carefully  prepared,  expensive  cuts,  booklets,  etc.,  on  the 
way  to  the  scrap  heap. 


I 


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I 
I 


CHAPTER  V 

THE  REGULAR  RETAILER   AND   NATIONAL   ADVERTISING 

THERE  is  no  point  at  which  there  is  more  dispute  about 
the  value  of  advertising  than  in  thu  relations  between  na- 
tional advertisers  and  retailers.  In  the  days  when  na- 
tional campaigns  were  few,  the  pioneers  in  the  field  were  able  to 
demonstrate  to  dealers  an  enormous  increase  in  speed  of  sale  as  a 
result  of  nation-wide  appeals  to  the  consumer.  But  with  in- 
creased conflict  between  these  national  appeals  themselves  as 
well  as  between  advertised  and  unadvertised  products,  it  be- 
came more  difficult  to  convince  the  retailer  of  the  substantial 
advantage  accruing  to  him  from  a  national  advertising  cam- 
paign. 

This  was  followed  by  the  development  of  various  forms  of 
dealer  help.  Window  displays,  counter  cards,  etc.,  were  worked 
out  by  various  national  advertisers,  and  a  great  variety  of 
plans  grew  up  for  co-operation  by  the  national  advertiser  with 
the  retailer  in  his  local  advertising.  It  was  characteristic  of 
all  these  efforts  that  they  aimed  to  stimulate  the  sale  of  the 
products  of  some  one  national  advertiser  directly.  When  there 
is  only  one  large  advertiser,  or  when  there  are  at  most  only  a 
very  few,  in  any  field  this  form  of  co-operation  between  the 
national  advertiser  and  the  retailer  still  works  very  effectively. 
But  when  the  number  of  concerns  bidding  for  the  dealer's  show 
window,  or  his  counter  space,  becomes  large  these  "dealer  helps" 
lose  most  of  both  their  interest  and  value  to  the  retailer. 

The  problem  of  "rising  costs,"  which  we  have  already  dis- 
cussed, has  become  the  most  absorbing  feature  of  the  thought 
habits  of  most  progressive  retailers.    And  some  national  ad- 

150 


RETAILER  AND  NATIONAL  ADVERTISING    151 


vertisers  have  grasped  the  connection  between  this  and  their 
responsibiUty  for  preserving  the  ability  of  advertising  to  help 
to  deliver  goods  from  the  producer  to  the  consumer  better  and 
with  less  waste  than  they  can  be  delivered  without  this  help. 

The  betterment  of  form  and  methods  in  dealer  helps  is  still 
in  progress  and  is  by  no  means  a  negligible  feature  of  the  present 
situation.  But  what  appear  to  be  the  two  most  important  new 
developments  in  the  relations  between  national  advertisers  and 
"regular"  retailers  are:  (1)  An  increased  appreciation  of  the 
national  advertisers'  stake  in  the  retailer's  fight  with  "rising 
costs."  (2)  Increased  attention  to  the  exclusive  agency  idea 
as  a  means  for  making  more  certain  the  results  of  national  ad- 
vertising. 

(1)   HELPING  THE  RETAILER  MEET  RISING  COSTS 

At  the  Rochester  Advertising  Club  meeting  on  March  18, 
1914,  O.  K.  Johnson,  President  of  the  Rochester  Retail  Shoe 
Dealers'  Association  and  Advertising  Manager  of  Wm.  East- 
wood &  Son  Company,  a  local  shoe-retailing  firm,  expressed  the 
retailers'  views  of  what  dealer  helps  ought  to  be  in  the  following 
language: 

*"The  manufacturer  who  thinks  that  he  has  a  cinch  on  a  con- 
siderable proportion  of  the  business  done  by  the  retailer,  be- 
cause he  advertises  to  the  consumer,  is  very  much  mistaken. 
Because  his  national  advertising  to  the  consumer  does  not  con- 
trol the  customer's  purchasing.  It  would  be  possible  to  name 
several  well-known  brands  of  shoes,  whose  names  are  well 
known  because  they  have  been  nationally  advertised,  of  which 
I  can  positively  say  that  in  seven  years  I  have  not  so  much  as 
heard  the  name  spoken,  either  by  members  of  the  company, 
manufacturer's  salesmen,  buyers  in  the  departments,  salesmen 
on  the  floor,  or  customers  in  the  stores,  and  they  are  nationally 
advertised.  But  I  do  hear  frequent  calls  for  the  product  of 
makes  whose  names  have  never  been  printed  in  magazines  or 
newspapers,  and  have  become  known  to  consumers  only  because 
a  retailer  has  made  them  known  to  his  customers. 

^Printeri  Ink,  April  2,  1914.  p.  97. 


1 


S< 


■l 


♦ 


152    RETAILER  AND  NATIONAL  ADVERTISING 

"The  retailer  controls  the  situation.  The  manufacturer 
will  never  control  it  by  national  advertising  or  by  branding  his 

The  Re-   product  with  a  trademark.      It  is  a  good  thing  for 
iailer  Con-  the  manufacturer  whose  product  is  distributed  through 

trds  the   retail  stores  to  get  next  to  the  retailer. 
SUimtum       "Help  the  retailer  sell  your  goods,  but  not  alone 
your  goods,  but  any  goods  that  he  may  carry  in  stock. 

"It  is  a  great  thing  to  be  able  to  regard  this  problem  from  the 
point  of  view  of  the  retailer.  What  do  you  do  for  the  retailer 
must  be  done  unselfishly,  not  to  help  sell  your  goods,  but  to 
help  sell  his  goods.  Way  back  in  the  subterranean  caverns  of 
your  mind  you  may  know  that  his  goods  are  your  goods,  but 
in  dealing  with  him  keep  yourself  in  the  background,  keep  your 
interest  concealed,  and  keep  him  and  his  interests  in  the  fore- 
front. Right  here,  too,  many  manufacturers  err;  everything 
they  try  to  do  for  the  retailer  is  so  permeated  with  themselves 
and  their  interests  that  they  fail  to  convince  the  retailer  of  their 
good  faith,  and  he  refuses  their  aid  because  he  does  not  feel  that 
his  interests  are  properly  conserved. 

"Do  you  know,  I  have  never  yet  seen  a  so-called  dealer's 

service  prepared  by  a  shoe  manufacturer  that  I  could  use.'^      If 

Why  Some  ^  wanted  an  illustration  of  a  shoe,  it  was  sure  to  have 

Dealer  the  name  of  the  manufacturer  cut  into  its  surface. 
Helps  Are  K  it  was  a  booklet  that  I  wanted  to  use,  it  was  sure 
I  Useless  j.^  jj^ve  in  it  some  outrageous  laudation  of  the  manu- 
facturer's product,  or  something  that  I  could  not  afford  to  let 
go  out  because  it  would  do  injustice  to  the  goods  of  some  com- 
petitor of  the  manufacturer,  and  I  must  not  make  a  gain  in 
business  in  one  line  at  the  expense  of  another,  save  as  difference 
in  quality  makes  the  distinction  between  the  two  lines. 

"Of  course,  I  know  that  when  a  manufacturer  smears  his 
name  and  his  trademark  over  everything  he  does  for  the  re- 
tailer, he  is  under  the  impression  that  he  is  making  a  little  money 
go  a  long  way  in  corralling  the  trade  of  a  large  number  of  the 
retailer's  customers.  But  he  is  mistaken.  He  is  practising  so- 
called  business  insurance .  But  business  insm-ance  is  not  to  be  had 
in  any  such  way.  It  is  to  be  had  by  quahty  of  merchandise 
and  satisfactory  factory  service,  and  on  these  grounds  only  are 
you  entitled  to  make  a  bid  for  further  business  from  the  retailer." 

The  call  which  retailers  of  this  type  have  made  upon  national 
advertisers  to  help  them  in  attacking  their  problems  has  not 


RETAILER  AND  NATIONAL  ADVERTISING    153 

fallen  always  upon  deaf  ears.  Help  of  far  wider  scope  and 
greater  practical  value  than  the  "dealer  helps"  of  even  five  years 
ago  is  no  longer  rare.  But,  if  one  may  hazard  a  forecast,  the 
movement  has  only  begun.  The  basis  for  such  a  forecast  lies 
not  in  the  fact  that  it  has  been  done  in  several  instances,  but 
that  some  of  the  far-sighted  minds  in  the  advertising  world  see 
its  possibilities. 

Earnest  Elmo  Calkins,  of  Calkins  &  Holden,  New  York,  re- 
cently wrote  a  reply  to  a  letter  which  Printers*  Ink  had  received 
questioning  the  value  to  retailers  of  national  advertising.  Mr. 
Calkins'  reply  presents  an  able  advertising  agent's  view  of  this 
very  situation.     The  letter  and  his  reply  were  as  follows : 

*Wm.    G.    HlLDEBRANDT, 
GBOCEBIES,  MEATS,   FBUITS,   AND  VEGETABLES 

Chappaqua,  N.  Y.,  January  9,  1915. 
Ekiitor  of  Printers^  Ink: 

What  right  on  earth  has  national  advertising,  anyway? 

What  justification  can  you  advertising  men  offer  for  its  existence? 

I  am  a  dealer. 

Every  once  in  a  while  I  buy  or  borrow  a  copy  of  Printers'  Ink  and  other 
advertising  publications  and  I  read  and  hear  a  whole  lot  about  the  desirability 
of  handling  nationally  advertised  goods.  I  get  a  ton  or  more  of  circular  letters 
and  folders  from  manufacturers  telling  what  a  lot  of  advertising  they  are 
going  to  do — how  it  will  "move  the  goods  right  off  the  shelves,"  "put  a  lot  of 
money  in  my  pocket,"  "start  a  stream  of  dollars  and  people  moving  my  way," 
"turn  my  stock  over  so  much  quicker  and  oftener  and  enable  me  to  make  so 
many  more  profits,"  and  so  many  other  wonderful  things  to  make  me  rich, 
prosperous,  and  fat,  if  I  will  only  lay  in  a  stock  of  goods  and  put  them  in  the 
window  or  advertise  them  in  my  local  paper. 

Most  of  them  are  especially  keen  alx>ut  the  latter.  "Connect  with  our 
national  advertising,"  they  say.  "Do  as  much  for  yourself  in  your  local 
papers,"  some  of  them  have  the  nerve  to  tell  me,  "as  we  are  doing  for  you 
through  our  national  advertising."  And,  "in  order  to  make  it  easy"  for  me 
"to  take  advantage  of  the  valuable  work  they  are  doing"  for  me,  most  of 
them  are  kind  enough  to  send  prepared  advertisements  and  electrotypes.  All 
with  complete  directions  for  using  in  my  local  paper  and  "getting  my  share  of 
the  big  profits." 

Very  few  of  these  national  advertisers,  however,  offer  to  contribute  toward 
the  cost  of  this  local  advertising,  and  most  of  those  few  that  do  want  you  to 
burden  yourself  with  an  awfully  big  stock  of  their  goods  in  return  for  an  aw- 
fully small  share  in  the  cost  of  the  local  advertising — not  to  mention  the 
trouble,  time,  mental  energy,  and  elbow  grease  involved  in  looking  after  the 
work  so  graciously  laid  out  for  you  by  the  benevolent  national  advertiser. 

*Printers'  Ink,  February  25,  1915,  p.  83. 


m 


<!l 


154    RETAILER  AND  NATIONAL  xVDVERTlSING 

Now  what  I'd  like  to  know  is  this:  If,  as  so  many  of  them  say  or  imply 
in  their  circulars,  my  local  advertising  is  necessary  to  make  their  national 
advertising  more  effective,  if  the  more  local  advertising  I  do  brings  so  many 
more  people  into  my  store  who  have  seen  "the  ads  in  the  magazines,"  tell  me, 
then,  please,  you  advertising  men,  why  national  advertising  is  necessary  at  all? 

What  proportion,  do  you  suppose,  of  those  whom  my  local  advertising  brings 
into  my  store,  don't  see  the  corresponding  magazine  ad? 

What  proportion  would  come  whether  they  saw  it  or  not? 

How  do  you  know  but  what  a  proportionate  share  of  the  money  spent  in 
magazine  space  added  to  the  amount  invested  in  local  space  would  not  bring 
far  more  people  into  my  store  for  a  given  brand  of  goods  than  the  same  amount 
split  up  between  magazines  and  local  papers? 

Tell  me,  if  you  can,  why  the  manufacturer  wouldn't  sell  more  goods  if  he 
cut  out  national  advertising  entirely?  Does  any  manufacturer  know  for  sure 
from  his  o^-n  records  and  experience  that  national  advertising  is  absolutely 
essential — that  he  couldn't  reach  more  people  by  depending  upon  local  adver- 
tising entirely? 

Of  course  I'm  not  a  manufacturer,  and  I  look  at  things  from  a  dealer's 
\ieA*'point,  but  as  a  close  observer  of  business  methods  for  many  years  I've 
come  to  the  conclusion  that  national  advertising  is  the  modem  fetish — "every- 
body does  it  because  everybody  does  it."  I  may  be  wrong— but  I'd  like  to 
have  some  tangible  proof  to  the  contrary'. 

Can  you  or  some  of  your  readers,  in  the  interest  of  good  advertising,  offer 
it  to  me? 

WiLUAM  G.   HiLDEBaANDT. 

Mr.  Hildebrandt:  You  ask,  "What  right  on  earth  has  national 
advertising,  anyway?" 

The  answer  to  that  is  easy.  It  is  that  the  national  advertiser, 
or  in  other  words,  the  manufacturer,  has  a  right  to  exploit  his 
business  in  any  way  he  sees  fit.  But  that  does  not  answer  the 
real  question  behind  your  rhetorical  question  which  is  this: 
**^Vhy  should  I  sell  advertised  goods?"  "How  am  I  benefited 
by  national  advertising?" 

In  other  words,  while  the  manufacturer  may  exploit  his  busi- 
ness in  any  way  he  sees  fit,  he  must,  for  his  own  sake,  exploit 
that  business  in  a  way  which  will  appeal  to  the  dealers  who  dis- 
tribute his  goods. 

That  puts  a  new  i^Tinkle  in  this  question,  because  your  point 
of  view,  whether  it  is  a  wrong  or  a  right  one  (and  I  hope  before 
I  have  finished  I  will  prove  to  you  that  it  is  a  ^Tong  one)  must 
be  reckoned  with  by  the  manufacturer  who  advertises  in  the 
hope  of  selling  his  goods  through  your  store. 

I  will  leave  the  question  of  the  dealer's  advertising  helps  and 
other  advertising  material  which  you  receive  in  such  large  quan- 
tities for  discussion  later,  while  I  take  up  the  question  of  the  ad- 


lii^ 


RETAILER  AND  NATIONAL  ADVERTISING    155 

vertised  goods  themselves  and  their  relation  to  your  store  and 
your  customers. 

The  people  who  buy  at  yom*  store  have  a  right  to  know  the 

name  of  the  maker  of  the  goods  they  buy.     While  advertised 

Cnnmmer*sS^^^^  are  not  essentially,  on  account  of  their  adver- 

Rinht  to   tising,  better  than  unadvertised  goods,  they  are  apt 

Know     to  be.    The  handling  of  advertised  goods  tends  to 

Brands  standardize  the  whole  transaction.  Makers  of  un- 
advertised goods  recognize  the  value  of  advertising  by  cutting 
the  price  of  their  own  goods  in  order  to  influence  the  dealer, 
which  is  not  in  the  long  run  to  the  best  interest  of  your  customers. 
Whatever  your  individual  experience  may  have  been,  the  selling 
of  goods  by  advertising  has  proved  of  great  benefit  to  the  great 
mass  of  people  in  more  ways  than  can  be  specified  in  a  single 
letter  like  this. 

This  brings  us  up  to  the  specific  advertising  of  a  given  manu- 
facturer whose  goods  you  sell. 

This  manufacturer,  having  spent  his  appropriation  in  national 
advertising  in  magazines,  or  newspapers,  or  street-cars,  or  bill- 
boards, or  some  of  them,  or  all  of  them,  and  having  taught  p)eo- 
ple  to  believe  that  his  goods  are  desirable  and  that  the  price  is 
right,  and  that  they  can  be  obtained  at  a  reasonably  large  num- 
ber of  retail  stores,  realizes  that  there  are  many  dealers  whose 
mental  attitude  toward  all  this  work  is  the  same  as  yours. 
He  tries  to  stimulate  the  good  will  that  he  ought  to  have  from 
you  by  offering  you  various  advertising  helps. 

The  retail  dealers  of  this  coimtry  in  all  lines  sp>end  through  the 
pages  of  their  local  papers  millions  of  dollars  in  advertising — much 
more  than  all  the  money  spent  by  all  the  national  advertisers — 
but  very  Httle  of  this  advertising  is  as  good  as  it  should  be. 

The  manufacturer  realizes  that  the  dealer  who  advertises 
regularly  and  has  to  fill  a  certain  space  in  his  local  papers  appre- 
ciates advertising  help  of  some  kind.  Many  manufacturers 
have  made  the  mistake  of  supplying  to  the  dealer  such  help 
overloaded  with  their  own  advertising.  I  believe  that  there  is 
room  for  improvement  in  the  ready-prepared  advertising  which 
the  manufacturer  furnishes  the  dealer.  I  think  that  a  large 
amount  of  the  stuff  sent  you  has  imdoubtedly  been  worthless. 
If  you  had  looked  at  it  more  critically  than  you  evidently  have, 
you  would  probably  have  found  some  good  things  in  it.  Also 
in  writing  about  it  stronger  claims  have  been  made  for  it  than 
should  be. 


I" 


IH 


156    RETAILER  AND  NATIONAL  ADVERTISING 

But  let  me  ask  you  a  few  plain  questions: 

Do  you  or  do  you  not  believe  that  advertising  in  local  news- 
papers helps  a  retail  store? 

If  such  advertising  helps  a  retail  store,  should  it  not  be  based 
upon  the  goods  that  that  store  sells? 

If  your  store  is  going  to  advertise  the  goods  upon  its  shelves 
which  advertising  will  go  farther — the  advertising  of  the  un- 
known goods  that  you  sell  or  the  advertising  of  goods  that  are 
othen\ise  advertised  by  the  manufacturer? 

If  you  should  prepare  copy  yourself  about  the  goods  in  your 
store,  and  if  you  should  decide  to  advertise  goods  that  are  na- 
tionally advertised,  would  you  or  would  you  not  welcome  an  in- 
telligent advertisement  furnished  by  the  manufactiu^r  of  these 
goods? 

This  is  the  theory  of  the  ready-made  advertising  suppUed  you 
by  the  manufacturer. 

If  you  advertise,  you  probably  utilize  the  mailing  of  your  bills 
each  month  to  carry  some  sort  of  a  stuffer  or  folder  about  your 
business.  Here  again,  if  you  sell  advertised  goods,  would  not  a 
folder  about  advertised  goods  have  more  weight  with  your  cus- 
tomers than  a  folder  about  unknown  goods?  Is  that  folder  any 
less  valuable  because  it  has  been  prepared  by  a  manufacturer's 
advertising  expert  than  when  it  has  been  prepared  by  you  per- 
sonally? 

No  retail  store  can  afford  to  hire  the  advertising  services  that 
a  manufacturer  can  hire.  He  is  undoubtedly  able  to  furnish  you 
better  literature  than  you  can  get  up  yourself.  If  that  litera- 
ture is  biased  in  favor  of  his  goods,  that  is  the  pay  he  gets  for 
the  expense  this  matter  costs  him. 

The  only  answer  you  can  make  to  all  these  contentions  is  that 
you  do  not  beUeve  in  advertising  at  all.  If  you  do  not,  there 
is  no  argument  upon  which  I  can  base  a  letter  in  reply  to  you, 
because  the  cause  of  national  advertising  rests  upon  the  same 
sound  basis  as  the  cause  of  retail  advertising. 

The  dealer  who  does  not  believe  in  advertising  and,  therefore, 
does  not  use  it,  is  so  hopelessly  out  of  the  running  in  these  days 
that  his  attitude  toward  national  advertising  is  more  or  less  negli- 
gible. 

I  do  not  beheve  you  belong  in  that  class.  I  imagine  that 
you  are  a  keen  and  live  advertiser  yourself,  and  that  if  you  wrote 
the  letter  which  you  have  signed,  you  are  able  to  write  some 
pretty  forceful  advertising  of  your  own. 


RETAILER  AND  NATIONAL  ADVERTISING    157 

You  are  one  of  a  large  class  of  dealers  who  imagine  that  their 
interests  and  those  of  the  manufacturer  who  advertises  are  dia- 
metrically opposed.  To  some  extent  they  are.  It  is  true  that 
the  dealer  who  exploits  the  manufacturer's  goods  in  his  own  ad- 
vertising thereby  ties  himself  up  with  those  goods,  but  it  is  not 
true  that  he  thereby  lessens  his  own  importance  in  the  town 
where  he  hves. 

The  great  success  of  nationally  advertised  goods  in  the  last 
twenty  years  means  nothing,  unless  it  means  that  the  public 
is  absolutely  sold  on  the  idea  of  advertised  goods.  IJnless 
enough  of  the  public  were  convinced,  convinced  often  enough 
and  convinced  about  a  great  enough  number  of  advertised 
goods,  to  make  a  large  jjercentage  of  this  advertising  successful, 
it  would  never  have  existed  until  now.  Therefore,  if  the  public's 
attitude  toward  such  goods  is  favorable,  if  the  public  buys  them 
by  preference,  then  the  dealer  who  boldly  proclaims  that  his  store 
is  filed  with  advertised  goods  is  advancing  his  own  interests. 

The  other  view  is  a  narrow,  petty,  and  small  one — the  dog-in- 
the-manger,  penny-wise-pound-foolish  attitude.  That  is  the 
view  of  the  dealer  who  says,  "I  won't  help  any  manufacturer 
sell  his  goods,  even  if  I  go  bankrupt.  I  will  cut  off  my  nose  and 
spite  my  face." 

The  Crofut  &  Knapp  Company  manufactures  hats.  A  sales- 
man of  this  company  called  on  a  hatter  in  a  certain  town  who 
said:  "I  like  your  hats  and  I  want  to  sell  them,  but  I 
am  much  better  known  in  this  town  than  you  are.  If 
you  will  let  me  have  your  hats  with  my  label  in  them, 
I  will  take  twelve  dozen." 

The  salesmen  was  a  diplomat.    He  said: 

"  Let's  make  a  test  case  of  this.  Let  me  sell  you  six  dozen  with 
the  C.  &  K.  label  in  them,  and  I  will  sell  you  six  dozen  with  your 
own  name  and  label.  Then  we  will  see  at  the  end  of  the  season 
whether  the  C.  &  K.  label  or  your  own  label  is  the  better  seller." 

At  the  end  of  about  two  months  the  Crofut  &  Knapp  Com- 
pany received  a  telegram  from  this  dealer  saying : 

"  Please  send  me  seventy  C,  &  K.  labels." 

In  other  words,  he  had  sold  seventy-two  hats  with  the  C.  &  K. 
label  in  them  and  two  of  the  same  hats  with  his  o\vn  label  in 
them  in  the  same  time. 

Something  like  this  is  true  more  or  less  of  all  advertised  goods — 
not  altogether,  because  I  am  very  far  from  claiming  that  only 
advertised  goods  are  reliable,  or  even  that  all  advertised  goods 


A  Case  in 
Point 


I 


158    RETAILER  AND  NATIONAL  ADVERTISING 

are.     I  beKeve  that  there  are  a  great  many  lines  as  good  as  or 
even   better  than  the  corresponding  advertised  goods.     The 
point  is  just  this:  that  the  customer  demands  a  surer  ground  to 
stand  upon.    He  wants  to  know  who  makes  the  goods  he  buys 
He  knows  that  the  dealer  does  not  make  them,  and  he  knows  that 
however  good  a  dealer  he  may  be  he  cannot  endorse  the  goods 
as  the  manufacturer  can.    He  does  not  want  to  buy  goods  with 
a  jobber  s  trademark  upon  them.    He  wants  the  trademark  of 
the  original   manufacturer.     His  demand  for  such   goods   is 
steadily  mcreasmg.    It  is  the  interest  of  the  manufacturer  who 
advertises  to  see  that  that  demand  increases.     It  is  the  Wic 
of  advertising.    The  dealer  who  fights  it  will  either  give  in  in 
the  long  run  or  give  up  altogether.    The  dealer  who  appreciates 
that  he  can  use  this  advertising  to  his  advantage  and  who  does 
so  use  It,  who  discriminates  in  the  lines  he  carries,  who  doesn't 
buy  a  line  simply  because  it  is  advertised,  but  who  doesn't  re- 
fuse to  stock  a  line  for  the  same  reason,  will  in  the  long  run  have 
a  better  business  and  a  better  standing  in  his  community  than 
the  dealer  who  follows  an  opposite  policy. 

Large  stores,  especially  department  stores  of  the  class  of 
VVanamaker  s  or  Marshall  Field's,  make  a  practice  of  avoidin^r 
advertised  goods  and  selling  products  with  their  own  names  upon 
them.  In  some  cases  these  products  are  identical  with  goods 
that  are  elsewhere  trademarked,  and  in  some  cases  they  are 
specially  manufactured  for  them.  Orders  from  such  stores  are 
solarge  that  they  frequently  take  the  entire  output  of  a  factory. 
Frequently  the  goods  so  made  up  for  these  stores  are  of  the  very 
u  n  ^^}^'  Nevertheless,  in  both  Wanamaker's  and  Mar- 
shaU  Field  s,  and  m  other  stores  of  a  similar  class  all  over  the 
country,  there  is  carried  a  certain  percentage— small,  it  is  true 
but  still  m  evidence— of  advertised  goods.  These  are  the  goods 
for  which  the  public  demand  is  so  strong  that  even  a  large  and 
powerful  department  store  cannot  ignore  it. 

The  point  that  you  bring  up  about  manufacturers  who  ask 
you  to  advertise  their  goods  in  your  local  newspapers  is  an  in- 
teresting one.  But  the  manufacturer  does  not  mean  that  the 
dealer  s  advertisement  is  necessary  to  make  his  advertising  effec- 
tive. What  he  says,  or  what  he  should  say,  to  you,  is:  "If  you 
will  advertise  m  your  own  local  newspaper  that  you  carry  these 
goods,  you  will  get  the  benefit  of  the  advertising  I  am  doing,  but 
this  advertising  I  am  doing  is  going  right  on  seUing  goods  through 
the  stores  that  will  carry  them,  whether  you  join  or  not." 


RETAILER  AND  NATIONAL  ADVERTISING    159 

The  sharp  distinction  that  you  draw  between  magazines  aud 
newspapers  exists  only  in  your  own  mind.     The  magazines 

Different  ^^^  newspapers  are  both  mediums  reaching  the  pub- 
Classes  of  lic.     The  difference  is,  as  far  as  the  manufacturer  is 

Mediums  concerned,  that  the  magazines  as  a  whole  cost  less  than 

All  Aid    |.jjg  newspapers  as  a  whole. 

A  national  campaign  run  in  newspapers  of  the  cities  where 
the  manufacturer's  goods  are  sold  is  unquestionably  the  ideal 
campaign,  but  it  can  be  conducted  only  by  a  manufacturer 
whose  business  is  so  large  that  he  can  spend  profitably  a  very 
large  appropriation.  Magazines  offer  a  less  expensive  way  of 
covering  the  entire  United  States,  covering  it  not  so  effectually 
as  newspapers,  but  still  covering  it. 

Finally,  the  suggestion  that  it  would  be  more  effective  for  the 
advertiser  to  divide  his  appropriation  among  the  dealers  who  sell 
his  goods  than  spending  it  in  the  magazines. 

This  is  sometimes  done,  especially  where  there  is  only  one 
dealer  in  a  town  that  carries  the  goods.  As  a  rule,  however, 
where  unlimited  distribution  is  necessary  and  where  a  number 
of  stores  in  each  town  sell  the  goods,  it  is  impossible  for  the 
manufacturer  to  do  this.  His  plan  is  to  convince  the  public  that 
the  goods  are  desirable,  and  then  to  urge  each  dealer  to  let  that 
public  know  that  he  carries  them.  This  is  sound  and  right, 
and  in  the  long  run  the  most  efficient  and  economic  method  of 
distributing  goods. 

The  last  question  in  the  letter  is  the  most  astonishing  one. 
It  asks  why  the  manufacturer  could  not  sell  more  goods  if  he  cut 
out  national  advertising  entirely.  I  cannot  take  this  question 
seriously  because  I  have  never  heard  it  seriously  contended  that 
advertising  reduced  the  sales  of  goods,  however  ineffective  it  was. 

I  ani  reminded  of  the  little  boy  who  fell  down  a  long  flight  of 
stairs  into  the  street.  A  kindly  old  gentleman  stopped  and 
asked  the  usual  fool  question:  "Did  it  hurt  you,  little  boy.?" 

The  little  boy  got  up,  rubbed  himself  and  limped  off,  saying: 
"  Well,  it  didn't  do  me  a  darned  bit  of  good." 

There  is  one  thing  more  for  you  to  consider,  Mr.  Hildebrandt. 
The  contest  between  advertised  and  non-advertised  goods,  as 
Two  Paths  far  as  the  dealer  is  concerned,  is  fast  becoming  one  of 
Open  for  relative  profit  to  the  dealer.  The  non-advertising 
tfte^  Retailer  manufacturer,  realizing  that  he  can  never  compete 
with  the  consumer  demand  created  by  the  advertising  of  his 
competitor,  promptly  bribes  the  dealer  with  the  offer  of  a  lower 


!60    RETAILER  AND  NATIONAL  ADVERTISING 

price.    This  lower  price  does  not  benefit  the  consumer.    It  is 
a  bonus  to  the  dealer  to  fight  advertised  goods. 

The  dealer  who  will  not  sell  advertised  goods  and  pushes 
unadvertised  goods  lays  himself  open  to  the  suspicion  of  selling 
not  the  best  for  the  price,  but  the  thing  that  pays  him  best.  You 
may  ask :  "  Why  should  I  not  ?    Am  I  not  here  to  make  all  I  can  ?  " 

That  would  be  good  business  if  it  were  good  business.  But 
if  the  public  knows,  and  it  is  learning  more  every  day,  then  it  is 
a  short-sighted  policy.  It  is  the  policy  of  a  man  who  would 
walk  rather  thay  pay  five  cents  car  fare,  who  would  light  his 
store  with  kerosene  rather  than  pay  the  higher  price  of  electric- 
ity. The  machinery  of  national  advertising  is  the  best  method 
of  sellmg  goods— the  best  for  all  concerned— maker,  retailer, 
user— and  the  dealer  who  refuses  to  ally  himself  with  it  and 
take  advantage  of  the  lower  cost  of  selling  and  the  good  will  of 
the  consumer  is  standing  aside  and  letting  the  Broadway  Lim- 
ited go  on  without  him,  while  he  sticks  to  the  stagecoach. 

These  facts  remain  and  cannot  be  controverted.  The  quality 
and  standard  of  advertised  goods  are  higher  than  of  non-adver- 
tised goods.  The  advertising  of  a  manufacturer  is  a  contract 
between  him  and  the  public  always  to  keep  up  the  quahty. 
The  tendency  of  advertising  is  to  improve  the  quality.  The 
retail  store  benefits  by  these  things.  It  is  enhanced  in  the  eyes 
of  Its  customers  by  their  working  out.  All  the  objections  of 
all  the  dealers  to  various  imperfections  and  drawbacks  of  this 
method  of  distribution  and  sales  are  outweighed  by  all  its  ad- 
vantages and  ultimate  rightness. 

Do  not,  Mr.  Hildebrandt,  let  the  injudicious  and  unwarranted 
claims  of  some  manufacturers  obscure  the  truth  and  force  and 
logic  that  are  behind  the  right  of  every  manufacturer  to  be 
known  to  the  consumer  by  the  goods  he  makes,  to  be  responsible 
to  the  consumer  for  their  quality,  and  to  use  your  store  as  the 
natural  and  inevitable  distributor  of  them. 

Tlie  fifth  in  the  series  of  articles  on  dealer  help,  quoted  in  the 
preceding  chapter,  contains  a  description  of  several  methods  of 
practical  co-operation  by  which  the  manufacturer  helps  the  re- 
tailer solve  his  most  serious  problems: 

♦Joseph  Schaffner  once  said  in  Printers'  Ink:    "We  have 
learned  by  experience  that  many  merchants  are  not  as  well 
*Pnnieri  Ink,  December  17.  1914,  p.  106. 


RETAILER  AND  NATIONAL  ADVERTISING    161 


informed  about  their  own  business  as  they  should  be;  that  they 
are  lax  in  watching  their  stock,  in  figuring  their  expenses,  profits, 
etc."  Since  then  quite  a  number  of  advertisers  have  turned 
their  attention  to  making  better  dealers,  realizing  that  in  so 
doing  they  were  making  bigger  sales.  Several  plans  of  that 
kind  are  in  evidence  this  season. 

The  object  of  all  these  plans  is  to  encourage  dealers  to  "trade- 
up";  that  is,  to  do  business  on  a  higher  plane.  The  old- 
fashioned  dealers  who  cling  to  the  policy  of  few  sales  and  big 
profits  should  be  taught  that  more  money  can  be  made  by  quick 
turnovers  and  small  profits;  those  who  are  given  to  slashing 
prices  should  be  taught  to  keep  books  which  will  soon  correct 
the  practice;  those  who  are  circularizing  mailing  lists  having 
too  much  lost  motion  should  be  shown  how  to  get  the  lost 
motion  out  of  them;  those  doing  business  without  an  inventory 
system,  and  who  consequently  carry  stocks  out  of  proportion 
with  their  sales,  should  be  shown  how  to  keep  a  simple  inven- 
tory which  will  release  this  capital  for  easy  selling  material; 
those  who  are  letting  delivery  systems  eat  up  profits  which 
might  be  put  into  merchandise  should  be  shown  how  to  reduce 
the  delivery  costs;  those  who  do  not  know  how  to  keep  tab  on 
costs  should  be  shown  simple  ways  for  doing  so,  and  so  on  down 
the  line.  Left  to  himself,  the  dealer  will  hardly  correct  these 
bad  practices;  it  is  to  the  manufacturers'  interest  to  help  him 
do  so.     ... 

One  example  of  real  dealer  co-operation — the  kind  that  gets 

below  the  surface — is  the  assistance  R.  H.  Ingersoll  &  Bro.  are 

Ingersoll    giving  jewelers  in  cost  accounting.     The  book  which 

Cost       is  called  "System  and  Cost  Accounting  for  the  Retail 

System  Jeweler"  was  prepared,  so  it  states,  by  the  most 
competent  experts  obtainable  and  thoroughly  tested.  The 
system  itself  is  complete,  simple,  and  requires  no  bookkeeper. 
This  is  important  in  recommending  cost-keeping  methods  to 
dealers. 

The  purpose  of  the  system  is  to  show  up  "leaks,"  disclose 
where  profits  go,  automatically  show  results  of  seUing  campaigns, 
insure  charging  of  credit  sales,  show  each  clerk*s  performances, 
give  repair  costs  and  profits,  and  prevent  the  accumulation 
of  old  stock.  The  system  is  a  plan  of  productive  record  keep- 
ing, displacing  old-fashioned  laborious  bookkeeping.  To  the 
dealer  who  instals  it  it  means  more  profits  and  provides  a  sys- 
tem for  collecting  information  to  guide  him  in  the  futiure.     To 


162    RETAILER  AND  NATIONAL  ADVERTISING 

the  manufacturer  it  means  a  better  dealer,  fully  alive  to 
the  profit  from  pushing  a  quick-selling,  widely  advertised 
watch. 

The  Ingersoll  people  go  a  step  further,  however,  than  merely 
suggestmg  the  system  to  the  dealer.  Years  of  experience  have 
taught  them  that  while  the  average  dealer  will  mentally  agree 
the  system  or  suggestion  is  fine,  unless  it  is  made  easy  for  him 
to  act  he  is  inclined  to  procrastinate  and  forget.  So  this  ad- 
vertiser furnishes  the  material  as  well  as  the  idea.  After  read- 
ing the  booklet,  and  deciding  that  his  business  needs  some  cost 
system,  all  he  has  to  do  is  to  tell  the  Ingersoll  people  so,  and 
they  will  provide  him  with  the  "tools"  as  they  call  the  forms 
and  books  used  m  their  system.  The  dealer,  of  course,  pays 
the  cost  price  for  the  material,  which  is  naturally  a  good  deal 
cheaper  than  he  could  buy  it  for  himself. 

Does  the  dealer  appreciate  this  help.?  The  many  letters 
which  the  company  has  received  from  dealers  all  over  the  coun- 
tpr  show  that  they  not  only  appreciate  it,  but  it  is  increasing 
their  busmess.  Here  is  one  letter  from  a  jeweler  in  Philadel- 
phia  which  reflects  the  common  attitude : 

Gentlemen:  I  have  received  your  "Business  System,"  also  copy  of  the 
explanation  book  for  the  same.  I  wish  to  thank  you  most  sincerely  for  vour 
interest  m  the  trade,  as  I  think  this  is  the  best  thing  ever  happened 

I  have  installed  the  System,  the  explanation  book  making  the  same  more 
easy,  and  m  the  future,  instead  of  being  a  "guesser,"  I  will  be  able  to  give  a 
correct  and  comprehensive  report  on  my  business. 

I  do  not  believe  there  b  another  jeweler  more  enthusiastic,  or  more  proud 
of  havang  a  real  good  system,  than  I  am,  and  I  was  up  all  night  several  weeks 
ago  taking  account  of  stock,  and  getting  the  Svstem  started. 

You  will  find  evidence  of  my  having  used  "^Business  System  in  vour  office 
now.  t>everal  days  ago  I  sent  Purchase  Order  No.  1  for  electros,  and  Purchase 
Order  No.  S  for  1.000  Repair  Envelopes  and  100  Sales  Book  Slips. 

I  have  already  seen  the  benefit  of  having  a  good  system  in  taking  account  of 
stock.    1  found  I  had  more  money  invested  in  clocks  than  I  had  any  idea  of 
and  m  consequence.  I  am  making  a  special  effort  to  sell  clocks 

I  have  the  Ingersoll  and  IngersoU-Trenton  watches  well  displayed  in  show 
window,  and  am  making  it  my  aun  to  push  their  sale. 

Wishing  you  the  greatest  success,  I  remain. 

Yours  truly.  x.  Wm.  F.  Kiefer. 

An  important  point  about  this  book  is  that  no  mention  is 
made  of  Ingersoll  watches  in  the  copy.  One  or  two  of  the  forms 
reproduced  bear  the  name,  but  it  has  been  purposely  kept  out 
of  the  book.     It  would  not  do  to  create  n  suspicion  in  the  dealer's 


RETAILER  AND  NATIONAL  ADVERTISING    163 


mind  that  the  manufacturer  had  any  interest  in  the  plan  out- 
side of  helping  him,  and  thus  making  a  better  customer. 

This  Ingersoll  plan  is  very  similar  to  that  being  used  by  Hart, 
SchafTner  &  Marx.    This  company  is  furnishing  a  book  known 

Special     as  "  What  Do  You  Know  About  Your  Own  Business? '' 

Sennce     According  to  Mr.  Schaffner,  almost  a  year  was  put  in 

Helpful  investigating  and  perfecting  before  this  book  was 
sent  out  to  Hart,  SchaflFner  &  Marx  dealers.  Its  purpose  is  to 
encourage  dealers  to  spend  a  few  minutes  every  day  in  keeping 
a  perpetual  inventory  which  the  company  suggests.  If  dealers 
can  be  made  to  do  this,  the  company  feels  that  they  will  be 
better  dealers  and  bigger  buyers  of  Hart,  Schaffner  &  Marx 
clothes.  As  such  books  are  issued  purely  to  help  the  dealer — 
at  least  visibly — and  no  effort  is  made  to  sell  him  anything,  they 
cannot  help  but  prove  a  good-will  builder,  even  if  their  aim  in 
other   directions   fails.     .     .     . 

Similarly,  Moller  &  Schumann  Company,  the  varnish  people, 
maintain  a  special  department  to  help  dealers  in  problems  of 
finance  and  business  management.  It  is  under  the  jurisdiction 
of  the  credit  department  and  has  already  been  described  in 
Printers'  Ink.  This  kind  of  co-operation,  while  expensive  for 
the  advertiser  with  thousands  of  dealers,  is  invaluable  to  the 
dealer,  and  in  the  case  of  Moller  &  Schumann  Company  has 
proved  a  great  credit  aid  and  good-will  winner.  Other  adver- 
tisers have  adopted  the  idea  in  partial  or  complete  form,  and 
the  plan  is  one  which  should  help  the  sales  end  of  a  business 
materially. 

While  cost-keeping  help  and  business  advice  to  dealers  is  a 
form  of  co-ojjeration  which  they  will  greatly  appreciate,  there 
are  many  other  ways  in  which  an  advertiser  can  give  real  help 
to  his  dealers,  and  at  the  same  time  help  himself.  This  is  par- 
ticularly true  in  regard  to  giving  advertising  assistance. 

And  the  most  crying  need  is  to  get  dealers  who  are  expected 
to  furnish  lists  of  customers  for  circularizing  to  keep  these  lists 
up  to  date.  A  Printers*  Ink  staff  investigator  went  into  the 
store  of  a  New  Jersey  clothier  handling  Stein-Bloch  clothes. 
The  dealer  was  one  of  the  kind  who  was  his  own  advertising 
manager,  head  salesman,  and  merchandise  man,  as  well  as  chief 
bundle  wrapper,  cashier,  and  floorwalker. 

"What  do  you  think  about  this  idea  of  an  advertiser  send- 
ing out  announcements  to  your  customers?'*  the  dealer  was 
asked. 


I? 


164    RETAILER  AND  NATIONAL  ADVERTISING 

"Great  stuff,  especially  when  the  advertiser  pays  the  postage," 
was  the  reply. 

Keeps         "  Well,  supposing  I  was  a  manufacturer  and  was  will- 

Mailing    ing  to  spend  say  five  cents  each  on  your  best  customers, 
Lists      where  would  you  get  the  names?" 

'^'^  The  dealer  thought  a  while,  and  then  said:  "Oh,  I 
suppose  I  would  send  you  the  telephone  book.'* 

**Is  that  what  you  send  Stein-Bloch.?"  he  was  asked. 

"No,  indeed,  I  have  to  pay  the  postage  on  Stein-Bloch  letters. 
I  have  a  mailing  list  which  I  keep  on  cards  suggested  by  them 
for  that  purpose;  there  is  too  much  waste  in  a  telephone  direc- 
tory, the  postage  would  run  up  too  high  to  make  it  pay." 

Asked  to  show  the  cards  he  used,  the  dealer  took  down  a  card 
file  from  one  of  the  shelves  in  the  back  of  the  store,  and  showed 
a  list  that  would  be  a  credit  to  any  manufacturing  business — 
quite  different  from  the  average  lists  which  dealers  send  in. 
This  card  showed  at  a  glance  just  what  kind  of  merchandise 
the  customer  would  be  interested  in  buying.  It  showed  what 
he  has  bought  in  the  past,  whether  he  is  married  or  single, 
whether  his  last  purchase  was  made  by  himself  or  by  his  wife, 
the  customer's  position,  what  kind  of  clothing  he  is  interested 
in,  the  price  of  suits  he  buys,  and  whether  he  is  a  cash  or  credit 
customer.  All  this  information  is  utilized  when  a  circular  is 
sent  out,  and  the  circular  is  made  to  suit  the  different  groups. 
Metal  signal  tabs  are  used  along  the  top  of  the  card  to  make  it 
easy  for  the  dealer  to  pick  out  those  interested  in  the  various  lines 
handled  by  the  store,  or  to  show  whether  he  buys  high-,  medium-, 
or  low-priced  suits. 

Questioned  further,  this  clothier  produced  the  booklet  which 
Stein-Bloch  had  sent  him,  and  which  had  induced  him  to  put 
in  this  modem  card  system.  Advertisers  who  are  troubled 
with  having  dealers  send  in  wasteful  lists,  which  make  this 
form  of  co-op)eration  unnecessarily  expensive,  will  be  interested 
in  a  section  from  this  book  which  shows  the  dealer  how  to  get 
worth-while  names : 

"First,  take  names  of  all  charge  accounts  that  you  consider 
good  and  fill  in  cards  as  far  as  information  on  books  will  help 

Cutting  yo^ — ^have  each  clerk  in  your  store  go  through  these 
Waste  out  cards,  adding  what  information  he  can  to  cards  of 
of  Dealer's  customers  whom  he  knows. 

LisU  "Take  names  from  club  lists,  telephone  directories, 

etc.     Check  these  first  against  the  cards  from  credit  customers 


RETAILER  AND  NATIONAL  ADVERTISING    165 

and  from  different  lists  to  avoid  duplicating — the  most  practical 
way  to  make  this  checking  and  entering  easy  is  to  provide  your 
card  system  with  an  extensively  divided  alphabetical  guide. 
This  is  usually  based  on  one  hundred  divisions  to  one  thousand 
names  in  list.  Have  these  cards  gone  over  by  clerks  for  ac- 
quaintances. 

"Do  not  put  metal  tabs  on  cards  until  the  information  on  card 
is  suflScient  to  make  it  practical  to  use  as  a  prospect.  The  foL 
lowing  schedules  show  what  information  is  necessary  to  starv 
active  card: 

.  Prospective: 

Name  and  address 
Approximate  age 
Business 

Position  in  business 
Estimated  income 

Customer: 
Name  and  address 
Approximate  age 
Business 

Position  in  business 
Estimated  income 
Sales  records  to  indicate  class  of  purchases 

Boys  and  Children: 
Name,  age,  and  address 
Parent's  name 

"Always  address  mail  to  home.  In  sending  out  letters  on 
boys'  clothing  the  letter  should  be  addressed  to  boy's  own  name, 
care  of  his  parent." 

This  booklet,  the  Stein-Bloch  people  say,  has  caused  many 
of  their  dealers  to  put  in  the  system,  with  the  consequence  that 
the  money  spent  by  Stein-Bloch  in  circularizing  dealer  lists  pro- 
duces greater  results. 

A  simpler  plan  for  encouraging  dealers  to  keep  more  efficient 
lists  is  to  urge  them  to  send  to  the  various  addressing-machine 
manufacturers  for  system  books.  The  larger  companies  issue 
special  bulletins  showing  how  retail  establishments  can  build 
up  efficient  mailing  lists.    These  bulletins  also  contain  informa- 


166  RETAILER  AND  NATIONAL  ADVERTISING 

tion  which  would  help  a  dealer  in  taking  the  lost  motion  out 
of  his  present  list.  The  manufacturer  is  vitally  interested  in 
his  dealer's  lists,  and  any  effort  spent  in  that  direction  should 
prove  most  productive  of  good. 

But  the  most  appreciated  co-operation  of  the  suggestive  type 
seems  to  be  giving  the  dealer  selling  ideas.     This  is  the  phase 

SeUing    of  business  that  interests  him  most,  and  while  he  picks 
Suggestions  up  ideas  from  the  salesmen,  an  advertiser  can,  by 

Needed  making  the  advertising  department  a  clearing  house 
for  selling  ideas,  win  a  dealer's  good  will  readily  in  this  way. 
One  advertiser  who  does  this  is  the  Goodyear  Tire  &  Rubber 
Company. 

A  glimpse  into  the  Goodyear  methods  might  be  interesting. 
Just  lately  it  has  issued  a  very  beautifully  printed  and  illus- 
trated book  called,  "New  Ways  to  New  Business."  While  a 
good  portion  of  the  book  is  given  over  to  cataloguing  the  various 
helps  and  showing  how  they  can  be  used  profitably,  several 
pages  contain  suggestions  for  selHng  plans.  The  dealer  is 
sho\^Ti  how  to  organize  a  "mileage  club,"  in  which  fobs  are 
given  by  the  dealer  to  the  rider.  When  he  rides  100  miles  he 
gets  a  yellow  button,  200  miles  entitles  him  to  a  blue  button, 
and  when  he  makes  1,000  miles  the  dealer  presents  him  with  a 
fob.  This  plan,  of  course,  appeals  to  the  boys,  and  as  the  but- 
tons and  fobs  are  furnished  by  the  company,  the  cost  to  the 
dealer  is  slight. 

In  the  same  way  plans  are  suggested  for  various  kinds  of  con- 
tests: races  that  start  in  front  of  his  stores,  coasting  contests, 
selling  the  Boy  Scouts  by  getting  them  to  organize  bicycle 
squads,  forming  bicycle  clubs  and  other  plans  of  that  kind. 
Dealers  appreciate  such  suggestions  and  act  on  them.  By 
furnishing  them  in  a  book  form  as  the  Goodyear  people  do, 
instead  of  scattering  them  through  a  house-organ,  they  can  be 
made  to  serve  a  double  purpose:  help  the  dealer  and  insure  his 
keeping  the  catalogue  of  selling  helps  and  utilizing  the  ideas. 

The  foregoing  are  only  a  few  selected  examples  taken  from 
the  newer  co-operation  plans  of  manufacturers.  There  are 
many  others  equally  effective,  so  far  as  getting  down  to  funda- 
mentals and  making  better  dealers  is  concerned.  These  have 
been  mentioned  to  show  the  possibilities  of  the  idea.  Just  how 
each  manufacturer  can  help  his  dealers  most  eflFectively  is  for 
the  manufacturer  himself  to  solve;  but  one  thing  is  plain:  there 
are  few  better  methods  of  securing  and  holding  the  trade's  good 


RETAILER  AND  NATIONAL  ADVERTISING    167 

will  than  by  helping  them  to  become  better  dealers.  It  is  a 
form  of  co-operation  that  is  comparatively  inexpensive,  and  if 
tactfully  offered,  mighty  remunerative. 

George  S.  Louis,  of  Chicago,  Advertising  Manager  for  Paris 
garters,  who  has  made  a  sp)ecialty  of  getting  the  retailer's  point 
of  view,  declares  that  the  securing  of  the  retailer's  co-operation 
is  largely  a  matter  of  tact  and  of  appeals  to  the  motives  which 
normally  control  men  in  their  business  dealings.    He  says : 

*The  retailer  is  responsive  to  the  same  appeal  and  is  spurred 
to  action  by  the  same  motives  that  influence  all  other  human 
beings.  The  dollar-sign,  sentiment,  pride,  dignity,  ambition, 
and  all  the  other  factors  that  influence  you  or  me,  bear  the  same 
weight  upon  the  retailer. 

I  only  dare  to  make  such  apparently  idle  statements  because 
of  the  curiously  inverted  methods  of  approach  to  the  retailer  that 
are  employed  by  the  average  manufacturer  and  wholesaler. 
The  approach  that  does  not  inspire  friendliness  and  confidence 
is  severely  handicapped.  The  present  practices  of  approach 
to  the  retailer  are  rousing  his  antagonism;  the  methods  of  ac- 
costing the  merchant  that  are  now  in  vogue  reflect  upon  his 
intelligence,  his  dignity,  and  his  business  ability.  The  retailer 
resents  it,  and  this  resentment  is  making  the  selling  to  the  retailer 
a  far  more  expensive  and  diflScult  undertaking  than  necessary. 

During  the  past  six  years  I  have  had  this  fact — the  approach 
of  the  manufacturer — discussed  and  analyzed  for  me  by  an  aver- 
age of  25  retailers  in  every  State.  My  comments  upon  this 
question  are  based  upon  the  dealers'  own  verdict  in  addition 
to  my  own  exjjerience  and  exi>erimenting  in  appealing  to  the 
retailers  in  behalf  of  a  goodly  number  of  manufacturers. 

In  the  first  place,  the  retailer  heartily  dislikes  being  addressed 
as  a  "dealer."  This  is  the  term  that  is  generally  employed  in 
Mercfiant  *^he  literature  and  letters  sent  to  the  retailer.  The 
Dislikes  term  "dealer"  catalogues  the  merchant  as  a  mechani- 
"  ^nZ^  '•  ^?^  distributor,  and  implies,  according  to  the  interpreta- 
tions  of  the  dealers  themselves,  that  they  are  not  active, 
important,  necessary  selling  factors  in  the  course  of  distribution. 
So,  as  the  spokesman  of  hundreds  of  retailers,  who  have  ex- 

*Printer8'  Ink,  January  8, 1914,  p.  98. 


108    BETAILER  AND  NATIONAL  ADVERTISING 

pressed  their  dislike  to  this  form  of  address,  I  advise  its  disuse; 
address  him  as  "Mr.  Merchant,"  or  "Mr.  Retailer,"  and  you 
will  have  the  foundation  for  an  approach  that  will  gain  his 
favorable  attention. 

I  have  made  a  rather  careful  study  of  the  letters,  circulars, 
and  other  literature  and  trade-journal  advertising  that  has 
been  intended  to  approach,  interest,  and  sell  to  the  retailer. 
I  am  now  in  constant  and  intimate  communication  with  one 
hundred  live,  successful  merchants,  of  whom  ten  of  each  are 
conducting  clothing,  drygoods,  shoe,  hardware,  jewelry, 
grocery,  drug,  cigar,  paint,  and  oil  and  general  stores.  These 
one  hundred  retailers  are  scattered  from  coast  to  coast,  and 
represent  the  most  intelligent  and  enterprising  of  the  average 
and  smaller  community  storekeepers  whom  I  met  in  my  four 
years'  retailer  investigation. 

From  these  one  hundred  merchants  I  receive  almost  daily  the 
literature  that  is  sent  them  from  various  manufacturers,  with 
their  comments,  whether  or  not  they  answered  or  acted  ac- 
cording to  the  approach,  and  giving  me  their  reason  for  what- 
ever action  they  did  or  did  not  take.  Ninety  per  cent,  of  this 
matter,  I  find,  does  not  arouse  any  feeling  of  interest  because 
it  talks  ai  the  merchant  instead  of  to  him.  This  diflFerence  in- 
volves, first,  the  use  of  the  pronoun  "we"  instead  of  "you," 
and  second,  the  exploitation  of  the  goods  instead  of  their  sell- 
ing value. 

These  differences  are  well  illustrated  in  the  following  incident: 
A  prominent  shoe  manufacturer  mailed  an  expensive,  three-color 
circular  to  a  large  hst  of  shoe  retailers.  In  part,  this  circular 
read: 

"  We  have  been  in  business  thirty-five  years.  We 
began  our  business  in  a  small  two-story  frame  house; 
now  we  are  occupying  a  ten-story,  block  square 
_  We  employ  three  thousand  workers.  We  spend 
$80,000  each  year  in  educating  and  influencing  men  and  women 
to  ask  for  and  buy  our  shoes.  In  their  stylish  appearance,  com- 
fort, and  wearing  qualities,  there  are  no  better  shoes  made." 

All  the  copy  of  this  circular  was  of  this  trend.  A  small  try- 
out  order  was  attached  to  the  circular,  which  the  merchant  was 
urged  to  sign  and  return.  I  happened  to  visit  this  concern,  just 
as  the  president  and  other  members  of  the  organization  were 
discussing  the  unexpectedly  poor  results  that  this  circular 
produced.     After  hearing  their  rather  contemptuous  remarks 


The  Bad 
Fleets  of 
Boasting 

building. 


RETAILER  AND  NATIONAL  ADVERTISING    169 


about  the  retailers  and  their  lack  of  intelligence  and  energy 
(for  they  placed  the  entire  blame  upon  the  retailer),  I  suggested 
that  they  experiment  with  the  same  copy  and  circular,  as  I 
would  rewrite  it,  to  a  limited  list  of  the  same  retailers.  They 
skeptically  granted  my  request.  Here  is  how  I  rewrote  that 
part  of  the  copy  quoted  above : 

"You  have  our  thirty-five  years  of  experience  at  your  com- 
mand. This  ten-story  building,  which  we  are  now  occupying, 
is  equipped  to  serve  you.  There  are  three  thousand  employees 
here  working  for  you  and  your  interests.  The  men  and  women 
of  your  towTi,  and  the  men  and  women  of  other  communities, 
are  being  influenced  to  ask  for  and  buy  our  shoes;  our  $80,000 
yearly  national  campaign  has  made  and  is  making  our  name 
and  the  quality  of  our  shoes  known  to  many  thousands  of 
possible  purchasers.  Quick  sales,  gratifying  profits,  and  pleased 
and  permanent  customers  are  assured  you  because  of  the 
stylish  appearance,  comfort,  and  wearing  quality  of  our 
shoes." 

Although  but  one  thousand  names  were  used,  and  the  circular 
was  a  far  cheaper,  one-color  job,  it  resulted  in  more  replies  than 
to  the  list  of  eight  thousand  retailers  to  whom  the  original  cir- 
cular was  sent.  The  second  circular  talked  directly  and  em- 
phatically to  the  merchant;  it  told  him  why  he  should  handle 
these  shoes  in  his  locality.     .     .     . 

In  the  many  discussions  I  have  had  about  the  advantages  or 
disadvantages  of  selling  advertised  goods  there  were  all  varie- 
ties of  opinions  expressed  by  the  retailers  about  the  power  and 
purpose  of  advertising.  But  eventually,  upon  cross-examina- 
tion, all  agreed  that  it  made  selling  an  easier,  quicker,  and  con- 
sequently a  more  profitable  process.  I  have  become  pretty  well 
convinced  that  the  retailer  is  very  susceptible  to  an  approach 
through  the  medium  of  advertised  lines.  This  is  not  only  so  be- 
cause the  retailer  appreciates  that  the  advertised  merchandise 
he  carries  is  more  salable,  but  because  the  retailer  is  also  a  reader 
of  magazines  and  newspapers,  and  an  observer  of  outdoor  dis- 
play; he  is  even  more  familiar  with  the  advertised  goods  of  the 
lines  he  sells  than  the  average  reader,  for  he  is  naturally  far 
more  interested  in  them.  Unconsciously,  he  becomes  more 
strongly  impressed  with  the  article  and  arguments  that  con- 
front him  in  advertising  than  he  is  aware.     .     .     . 

If  the  advertisers  would  only  be  content  to  tell  of  their  efforts 
in  co-operation  with  the  retailer  instead  of  attempting  to  influ- 


n 


1 


170    BETAILER  AND  NATIONAL  ADVERTISING 

ence  the  merchant  by  statement  of  what  the  efforts  will  accom- 
phsh,  a  marked  difference  in  the  effect  of  the  approach  would  be 
experienced.  The  retailer  appreciates  what  will  result  locally 
from  a  sound,  we  l^onducted  advertising  campaign.  He  knows 
this  better  than  the  advertiser.  He  has  been  sadly  disappointed 
by  the  too  allunng  promises  of  a  great  many  advertisers  of  what 

Merchant  ^'''''^'^  ^P^f^  ^  ^^  ^'^  ^^^''^  goo<ls.     This  form  of 
Knows    approach,  the  promised  reward  if  the  retailer  orders 

Bis  Field  goods,  IS  received  very  skeptically.    The  most  favorable 
comments  upon  all  the  campaigns  that  the  retailers 
discussed  with  me  were  of  a  hardware  concern  which  approached 
the  retailer  on  the  following  basis: 

*;We  are  advertising  in  twelve  magazines  of  wide  circulation, 
ihis  campaign  will  be  continued  throughout  the  year.  This 
advertising  will  surely  attract  the  attention  and  interest  of 
many  thousands  of  possible  buyers,  among  whom  there  will 
undoubtedly  be  a  great  many  in  your  locality.  If  by  this  ad- 
vertising we  can  influence  possible  buyers  to  go  to  your  store 
we  know  you  can  make  them  your  customers." 

Then  followed  a  detailed  analysis  of  each  medium  which  was 
being  employed  bv  these  people  for  this  publicity  campaign. 
Ihey  did  not  make  any  definite  statements  about  what  the 
campaign  would  accomplish.    They  used  the  terms  "possible," 

probable,  likely,"  etc.,  when  they  made  any  statements 
that  referred  to  the  results  that  might  be  expected.  The  sen- 
tence If  by  this  advertising  we  can  influence  possible  buyers  to 
your  store,  we  know  you  can  make  them  your  customers"  was 
received  with  particular  favor.  This  came  as  a  delightful  relief 
to  the  merchants  who  were  accustomed  to  bold,  superlative 
claims  about  the  "created  demand"  and  its  tremendous 
power. 

To  approach  the  retailer  by  means  of  the  consumer  is  a 

mighty  effective  way  to  gain  his  attention,  if  it  is  properly  done. 

Getting    When  the  advertiser  tries  to  force  interest  by  shouting 

Rdailer    about  the  "created  demand"  for  his  goods,  he  will 

Co^^mer  ''T^''^  ^"^  ^^^^  Consideration.  The  retailer  stoutly 
refuses  to  acknowledge  that  a  created  demand  means 
sales  unless  he,  the  retailer,  works  in  conjunction  with  such  a 
demand.  The  retailer  does  not  dispute  that  advertising  will 
and  does  create  a  demand  for  goods.  He  has  had  too  many 
requests  for  advertised  merchandise  to  ignore  this  fact.  But 
—don  t  overlook  this— he  has  been  successful  with  too  many 


RETAILER  AND  NATIONAL  ADVERTISING    171 


fiubstitutions  not  to  realize  that  the  created  demand  is  not  neces- 
sarily a  sale  unless  he  acts  in  co-operation  with  it.  The  man- 
date that  so  many  manufacturers  issue,  "Stock  up;  we  have 
created  a  demand  for  our  goods.  If  you  sell  our  goods,  they'll 
come  to  your  store  and  buy,"  is  no  longer  of  very  much  weight 
with  the  average  retailer.  One  of  the  most  effective  approaches 
to  the  retailer  that  I  know  of  is  that  of  a  woman's  garment  manu- 
facturing establishment,  which  places  the  matter  before  the 
retailer  in  this  way:  "With  your  active  co-operation,  we  can  be 
of  tangible  service  to  you  in  bringing  customers  to  your  store. 
Our  national  campaign  in  the  following,  well-known,  influential 
women's  magazines  (here  follows  the  list)  is  arousing  an  interest 
in  our  garments,  and  influencing  women  to  go  to  the  stores  that 
sell  them.  We  sincerely  believe  that  if  you  have  a  fair  assort- 
ment of  these  garments  in  stock  and  advertise  the  fact  in  your 
local  paper  and  otherwise,  and  use  your  best  selling  effort  in 
co-operation  with  us,  you  will  be  able  to  build  up  a  large,  profit- 
able, and  permanent  business.'* 

Two  letters  and  one  circular  containing  arguments  of  this 
nature  were  sent  to  twelve  thousand  prospective  dealers.  A 
little  over  six  thousand  replied.  This  approach  gave  recognition 
of  the  ability  and  power  of  the  retailer.  The  manufacturer 
asked  co-ojjeration  from  the  retailer;  co-operation  was  not  offered 
from  manufacturer  to  retailer  as  is  customarily  done.  The  real 
burden  of  selling  was  placed  on  the  retailer's  shoulders,  and  it 
pleased  and  flattered  him. 

Recall,  if  you  will,  the  approaches  that  have  gained  access 
to  your  ear  and  mind.  Were  they  not  of  the  quiet,  but  decisive, 
straightforward,  business  calibre  that  gave  recognition  of  your 
ability  to  handle  your  own  affairs?  Did  an  approach  that  in- 
volved threats,  bribes,  or  flattery  ever  gain  its  object  with  you? 
Apply  the  same  methods  of  approach,  to  which  you  yourself 
are  susceptible,  to  the  retailer,  and  see  how  most  eagerly  he 
will  respond. 

(2)      THE   EXCLUSIVE  AGENCY  PLAN 

In  recent  years,  since  the  control  of  resale  prices  has  been  so 
sharply  restricted  as  a  result  of  court  decisions,  the  exclusive 
agency  plan  has  been  adopted  by  many  national  advertisers 
as  a  means  for  securing  the  active  support  of  the  retailers  and 
for  guaranteeing  to  the  retailers  of  the  fullest  possible  advantage 


j 


I 

1 


I. 


172  BETAILER  AND  NATIONAL  xU)VERTISING 

of  the  publicity  which  constitutes  the  main  feature  of  the  na- 
tional advertiser's  plans.  M.  Zimmerman,  a  staflF  investigator 
of  Printers*  Ink^  has  made  a  report  on  exclusive  agencies  which 
shows  how  this  method  is  working  in  some  cases: 

*In  making  my  visits  to  the  various  dealers  in  their  several 
lines,  such  as  clothing,  haberdashery,  hardware,  drugs,  groceries, 
etc.,  I  found  that  as  a  general  rule  the  dealer  admitted  that  there 
were  some  advantages  in  the  exclusive  agency  proposition.  I 
found  that  a  great  many  of  them  went  after  it  and  would  even 
go  to  the  extent  of  putting  themselves  in  the  hands  of  the  manu- 
facturer who  could  throw  them  over  whenever  he  wanted  to. 
I  also  found  that  some,  while  they  realized  the  advantages  of 
the  exclusive  agency,  considered  that  there  were  great  disad- 
vantages as  weU,  and  went  rather  slowly  before  accepting  an 
exclusive  agency;  and  these  generally  tied  themselves  down  with 
some  sort  of  a  contract  whidh  was  mutual  and  usually  lasted  for 
a  term  of  years. 

In  a  great  many  cases  where  I  interviewed  dealers  who  held 
exclusive  agencies  they  begged  to  be  excused  from  talking  on 
this  subject  because  they  feared  that  something  they  might  say 
might  arouse  the  antagonism  of  the  manufacturer  with  whom 
they  were  doing  business.  I  remember  particularly  that  the 
advertising  manager  of  one  of  the  largest  department  stores  in 
the  country  excused  himself  from  talking  on  this  matter,  and 
I  know  that  this  department  store  carries  a  great  many  exclu- 
sive brands.  The  same  thing  happened  in  the  case  of  a  small 
dealer  who  carried  well-known  brands  of  clothing. 

Among  those  I  interviewed  was  a  haberdasher  in  a  city  of 
400,000.  This  haberdasher  is  one  of  the  leaders  in  his  city,  and 
is  one  of  the  agents  for  Manhattan  shirts  and  Stetson  hats.  I 
broached  the  question  of  the  exclusive  agency  to  him,  and  he 
said  that  he  was  very  much  in  favor  of  it  because  it  enabled 
him  to  feature  the  product,  for  which  he  was  exclusive  agent,  in 
his  store. 

"In  the  first  place,"  he  said,  **it  is  so  easy  to  sell  that  shirt 
that  I  do  not  have  to  spend  any  time  convincing  my  customers 
of  the  merits  of  the  article,  for  the  man  who  comes  in  and  asks 
for  a  Manhattan  shirt  is  already  familiar  with  its  merits.    My 

*PnnierM*  Ink,  April  30,  1014,  p.  «7. 


)M* 


RETAILER  AND  NATIONAL  ADVERTISING    173 

turnovers  are  quick  and  the  article  itself  brings  people  to  my 
store,  thus  helping  me  to  sell  my  other  merchandise. 

"But,"  he  continued,  "while  there  are  advantages,  there  is 

one  great  disadvantage  which  I  think  the  exclusive  agent  faces. 

One  Dis-  ^^^  ^^^*'  ^^'  ^^  ^^  always  at  the  mercy  of  the  manu- 

advantage  facturer.     Now  I  remember  that  when  I  first  started 

of  Exdu-  to  handle  Manhattan  shirts  fifteen  years  ago  there 

nve  Agency  ^^^^  only  one  other  man  in  this  city  besides  myself 

handling  them.     At  the  present  time  there  are  six  others.     So 

you  see  that  after  working  hard  and  putting  my  own  efforts  and 

time  into  pushing  this  particular  brand,  when  I  am  ready  to 

reap  the  benefits  of  my  work,  somebody  else  comes  in  and  shares 

them  with  me.     I  know  that  from  time  to  time  new  agencies  are 

being  opened,  and  pretty  soon  the  man  who  always  came  into 

my  store  to  buy  the  Manhattan  shirt  will  be  able  to  go  around 

the  corner  and  secure  one  there  also. 

"I  practically  carry  Manhattan  shirts  exclusively.  Now, 
supposing  that  any  time  the  Manhattan  shirt  p)eople  should 
have  a  quarrel  with  me  and  take  my  agency  away,  where  would 
I  stand  then?  All  my  years  of  effort  and  work  will  have  been 
in  vain.  .  .  .  And  I  am  quite  positive  if  I  had  been  pushing 
my  own  private  brand  in  the  fifteen  years  that  I  have  been  push- 
ing Manhattan  shirts,  and  had  put  the  same  amount  of  effort  and 
time  into  it,  while  I  might  not  be  doing  the  same  volume  of  busi- 
ness, my  profits  would  be  about  the  same,  and  I  would  not  have 
a  customer  who  could  go  around  the  corner  and  get  my  shirt. 
He  would  have  to  come  to  me  for  it." 

This  is  not  only  the  argument  of  one  merchant  in  this  Une; 
it  is  the  argument  of  a  great  many.  They  seem  to  feel  more 
or  less  the  same  way  toward  the  exclusive  agency  proposition. 

Among  others  I  interviewed  was  J.  Pinto,  of  Pinto  Brothers, 

Experience  ^^^  ^^  present  controls  four  fine  haberdasheries  and 

of  RetaUers  clothing  stores  in    New    York   City.     In    speaking 

with  Both  with  him  on  the  question  of  the  exclusive  agency — 

Methods    ^^  ^^  j^-g  advantages  to  the  dealer,  he  said: 

"  I  believe  an  exclusive  agency  is  a  good  thing  provided  you 
can  make  the  proper  contract  with  the  maniSacturer.  The 
great  trouble  is  that  in  the  case  of  a  well-advertised  article 
the  manufacturer  will  make  a  contract  to  suit  his  convenience. 
I  receive  many  offers  for  exclusive  agencies,  but  I  won't  touch 
them.  Some  time  ago  I  had  the  exclusive  agency  to  sell  E-Z 
Belts.    My  contract  was  for  two  years.     I  knew  that  the  object 


1 


1 


174    RETAILER  AND  NATIONAL  ADVERTISING 

of  the  manufacturer  was  to  have  me  open  the  market  for  him 
and  use  my  efforts  in  pushing  the  product.  Then  he  would 
extend  the  agencies  to  every  dealer  willing  to  carry  the  belts. 
Fortunately,  a  new  belt  came  out  which  was  an  improvement 
over  the  E-Z  Belt,  and  I  took  in  this  other  line,  so  I  did  not  care 
what  the  manufacturer  did  when  my  contract  expired. 

"There  was  a  time,"  he  continued,  "when  I  was  strongly 
opposed  to  advertised  goods  and  I  never  stocked  them.  While 
my  views  have  not  changed,  still  I  have  been  compelled  to 
change  my  policy,  so  that  now,  if  you  will  look  through  my 
shelves,  you  will  find  advertised  goods  aplenty.  And  this  is 
because  I  am  compelled  to  carry  them.  I  know  that  if  a  cus- 
tomer comes  in  here  for  Onyx  hosiery  and  I  cannot  give  it  to 
him  he  will  go  on  the  next  block  to  get  it.  It  is  to  meet  these 
conditions  that  I  keep  Onyx  hose.  And  sometimes,  to  meet 
conditions  of  the  advertiser,  I  get  up  an  article  under  my  own 
brand  to  compete  with  the  advertised  article.  For  example, 
at  the  time  when  Holeproof  hosiery  made  its  appearance,  I 
knew  that  its  great  value  lay  in  the  fact  that  it  was  guaranteed. 
So  I  got  out  the  Pinto  hose,  and  whenever  a  man  came  in  for 
Holeproof  hosiery  I  convinced  him  that  the  Pinto  hosiery  was 
just  as  good,  and  that  he  could  come  back  at  any  time  and  ex- 
change any  pair  of  hose  with  the  Pinto  label  on  that  was  not 
satisfactory  to  him.  And  I  can  assure  you  that  we  have  built 
up  a  fine  business  in  Pinto  hose,  and  many  a  time  I  get  a  tele- 
phone call  from  a  small  haberdasher  uptown  or  downtown  ask- 
ing if  I  won't  sell  him  Pinto  hose.     ... 

A  buyer  in  one  of  the  largest  department  stores  in  this  coun- 
try expressed  his  views  on  the  exclusive  agency  question  in  this 
way: 

"I  believe  it  is  a  bad  policy  for  any  store,  including 

^  ^t^^t^'  ^^^^'  *^  *^^®  ^^  exclusive  agency  for  any  article,  be- 
'"^Fiew'^*^  cause  it  puts  you  practicaUy  at  the  mercy  of  the 
manufacturer.     If  we  were  to  take  on  a  proposition  of 
this  sort,  after  advertising  and  using  our  best  efforts  to  build  up  a 
fine  trade,  the  manufacturer  might  for  some  reason  take  the 
agency  away  from  us  and  we  would  have  to  start  all  over  again. 
"The  great  value  of  the  exclusive  agency  to  the  manufacturer 
is  that  it  makes  him  distinctive  and  that  he  does  not  have  to 
fear  competition.    And  in  a  great  many  cases  where  the  ex- 
clusive agency  is  offered  it  is  because  the  manufacturer  wants 
to  create  a  demand  for  his  goods.     After  he  has  accompHshed 


RETAILER  AND  NATIONAL  ADVERTISING    175 

this  result,  he  takes  away  the  agency  and  everybody  may  get 
the  product. 

"Our  house  does  a  tremendous  lot  of  advertising  and  every 
article  we  advertise  as  a  general  rule  sells  in  great  quantities. 
Therefore  it  pays  us  to  feature  our  product  or  a  nationally  ad- 
vertised article  in  such  a  way  that  we  are  never  at  a  disadvan- 
tage." 

To  illustrate  what  the  department  store  buyer  had  in  mind  I 
need  only  cite  from  an  interview  which  I  had  with  Julius  Strauss 
of  1200  Broadway.  Mr.  Strauss  is  the  sole  distributor  in  the 
United  States  for  the  Imperial  Royal  Austrian  Lace  Industry. 
He  advertises  in  a  department-store  trade  paper  the  following 
special  offer: 

"Remember,  this  offer  will  be  made  to  one  store  in  each  town. 
If  you  accept  our  offer  at  once,  you  can  be  sole  agent  in  your 
community  for  the  sale  of  Imperial  Royal  Austrian  Laces,  and 
this  privilege  probably  amounts  to  a  franchise  which  will  grow 
more  valuable  month  by  month  and  year  by  year." 

I  asked  Mr.  Strauss  whether  he  thought  it  were  wise  to  tie 
himself  up  with  one  department  store  in  each  town. 

"Well,"  he  answered,  "the  reason  that  I  have  to  resort  to 
this  method  is  because  of  the  commodity  I  handle.  At  the 
present  time  Dame  Fashion  doesn't  favor  real  laces.  Laces  arc 
a  product  which  depends  upon  style,  and  just  now  people  want 
soft  and  filmy  laces.  I  must  educate  them  to  the  value  of  real 
laces.  In  order  to  do  this  I  have  to  make  this  special  offer 
through  one  store  in  a  community. 

"But  I  only  make  a  contract  for  a  season,  with  the  option  that 
the  department  store  may  renew  it  at  the  end  of  that  time. 
However,  as  soon  as  real  laces  are  well  known  and  are  appre- 
ciated by  the  public,  and  a  demand  for  them  is  created,  an 
exclusive  agency  would  not  be  so  essential."     .     .     . 

In  the  hardware  line  I  find  that  very  few  exclusive  agency 
propositions  are  offered  to  dealers.  Those  which  are  offered 
are  gladly  accepted.  Some  of  the  hardware  dealers 
inHard^  who  accept  these  exclusive  agencies  say  they  realize 
ware  Field  ^^^^  ^^^Y  ^^  ^^^  ^^^Y  ^  short  time;  that  as  soon  as  an 
article  is  in  popular  demand  they  will  lose  the  agency 
and  will  merely  become  one  of  the  many  who  will  handle  it,  and 
with  this  knowledge  in  view  they  take  advantage  of  their  op- 
portunities and  feature  the  articles  exclusively. 

I  interviewed  Mr.  Ludlow,  President  of  Ludlow  &  Squires 


"1 


)1 


176    RETAILER  AND  NATIONAL  ADVERTISING 

Hardware  Company,  Newark,  N.  J.  Mr.  Ludlow  said,  in 
part:  "I  favor  the  exclusive  agency  and  think  it  a  good  thing  for 
both  the  manufacturer  and  the  dealer.  I  always  try  to  get  the 
exclusive  agency  for  any  advertised  article  and  I  push  it  to  the 
utmost  while  I  have  it.  It  not  only  helps  me  sell  this  particular 
article,  but  it  sells  the  others  for  me.  There  are  not  many  ex- 
clusive agencies  in  this  line,  but  those  which  we  have  are  good 
because  the  products  are  meritorious  and  stand  for  quality. 
This  helps  us  build  up  our  reputation  for  our  own  products,  and 
one  of  the  most  important  things  about  the  exclusive  agency 
is  that  the  price  is  maintained,  so  we  are  able  to  make  a  fair 
margin  of  profit.  I  never  accept  the  exclusive  agency  with  the 
idea  that  I  am  going  to  keep  it  forever.  I  know  that  as  soon 
as  the  article  is  in  popular  demand  the  agency  will  be  extended. 
With  this  idea  in  mind,  I  always  make  special  eflForts  to  push  the 
article  and  get  the  most  out  of  it  while  I  have  it. 

"We  have  had  several  exclusive  agencies  taken  from  us. 
By  that  I  mean  that  they  were  extended  to  others.  However, 
we  do  not  lose  any  sales  by  this,  but,  as  a  matter  of  fact,  our 
sales  increase  normally.  I  don't  think  it  harms  us  in  the  least 
when  an  agency  is  extended,  but  I  would  rather  have  it  ex- 
clusively because,  after  all,  it  compels  a  person  to  come  to  our 
store  alone." 

I  talked  with  another  hardware  dealer,  located  in  Harlem, 
who  favored  the  exclusive  agency  and  said  that  it  is  all  right  as 
long  as  he  has  it.  "The  trouble  with  the  manufacturer  is  that 
he  always  gets  you  from  his  end,  but  you  have  no  recourse 
whatever.  A  salesman  comes  around  and  tells  me  that  I  will 
be  the  only  one  in  the  neighborhood  who  will  keep  a  certain 
article.  After  I  have  done  all  the  work  in  marketing  it  and 
using  my  personal  efforts  to  create  a  sale  I  find  that  my  next- 
door  competitor  has  it  in  the  window.  WTien  the  salesman 
comes  aroimd  again  he  swears  that  he  had  nothing  to  do  with 
it.  But  the  exclusive  agency  has  its  fine  points.  It  helps  us 
materially  in  our  own  business."     .     .     . 

One  of  the  men  connected  with  Hammacher,  Schlemmer  & 

Co.  said:   "It  is  to  the  advantage  of  the  manufacturer  to  give 

us  the  exclusive  agency.     Owing  to  the  fact  that  we 

^^  are  jobbers  as  well  as  litaUers  of  hardware  we  can  get 

1^  "  distribution  for  an  article  at  much  less  cost  than  the 

manufacturer  himself.    We  have  salesmen  who  visit  all 

dealers.     Our  catalogue  of  1,200  pages  goes  all  over  the  country. 


RETAILER  AND  NATIONAL  ADVERTISING    177 

If  a  manufacturer  has  no  money  to  invest  in  national  advertising 
we  can  get  distribution  for  him  through  our  salesmen,  catalogue, 
and  our  advertising  and  he  may  not  actually  lay  out  one  cent. 
All  we  exjject  is  a  fair  margin  of  profit. 

"Again,  it  is  of  value  to  a  manufacturer  to  have  only  one 
agency  for  a  certain  territory,  because  if  several  jobbers  are 
handling  the  same  articles  competition  arises  and  the  prices  are 
cut.  The  salesmen  of  these  various  houses  will  visit  the  same 
dealers,  and  the  result  will  be  that  one  will  try  to  undersell  the 
other.  It  is  known  in  many  cases  that  after  one  salesman  has 
quoted  a  price  and  a  second  one  comes  around  and  quotes  his 
price,  the  dealer  will  give  the  impression  to  the  second  sales- 
man that  the  first  one  is  trying  to  quote  him  a  much  lower 
price."     .     .     . 

*In  some  particular  products  it  is  necessary  that  an  exclusive 
agency  be  operated  in  order  to  maintain  the  standard  of  the  prod- 
uct as  far  as  quality  is  concerned. 

This  is  so  in  the  candy  business.  I  find  the  Whitman  and  the 
Huyler  people  maintain  agencies  in  most  cities.  The  reason 
for  this,  as  one  of  the  Huyler  representatives  told  me,  is  that 
candy  is  of  such  a  perishable  nature  that  makers  have  to  keep 
in  constant  touch  with  the  dealers.  If  manufacturers  sold  to 
everybody  in  the  country  they  could  not  keep  track  of  every 
dealer,  and  as  a  result  they  would  suffer  loss  owing  to  the  fact 
that  the  product  is  perishable. 

The  Huyler  system  of  doing  business  is  not  entirely  through 
exclusive  agencies.  "Limited"  agencies  are  used — the  number 
depending  upon  the  town  in  question.  Generally  the  best 
dealers  are  selected,  and  when  a  dealer  asks  for  an  agency  his 
business  is  investigated.  The  Huyler  people  claim  that  by  al- 
lowing these  special  agencies  the  dealer  is  in  a  position  to  feature 
their  goods,  and  they  put  in  their  candy  with  a  dealer  with  the 
express  stipulation  that  he  feature  it. 

This  does  not  necessarily  mean  that  the  dealer  cannot  keep 
other  brands.  He  can  do  that,  but  he  must  feature  Huyler's, 
and  I  am  told  that  in  some  cases  he  not  only  features  Huyler *s 
but  carries  it  exclusively. 

The  Huyler  people  claim  where  a  dealer  features  their  candy 
exclusively  it  is  not  only  an  advantage  to  them,  but  also  to  the  ad- 


! 


1 


*A 


^Printers'  Ink,  May  U,  1914.  p.  82. 


178    RETAILER  AND  NATIONAL  ADVERTISING 

vantage  of  the  dealer  himself.  To  illustrate:  a  certain  dealer  in 
the  West  had  been  a  consistent  buyer  and  was  using  a  lot  of 
Huyler's  goods.  Suddenly  the  orders  began  to  drop  until  very 
little  candy  was  ordered.  Upon  investigating  the  case  it  was 
found  that  the  dealer  had  from  time  to  time  installed  various 
other  lines  of  candies.  Huyler's  wrote  to  him  that  unless  he  was 
willing  to  feature  their  candies,  as  he  had  done  previously,  they 
would  be  compelled  to  take  the  agency  away  and  give  it  to  some- 
body else.  The  dealer  asked  for  a  little  time  to  investigate 
whether  this  change  had  proved  of  any  value  to  him.  Upon  in- 
vestigating his  candy  sales  for  the  entire  year  he  found  that 
during  the  time  he  had  carried  other  brands  of  candy  his  sales 
had  dropped  off  considerably,  and  he  said  the  reason  was  that 
instead  of  using  his  efforts  in  advertising  one,  he  had  not  known 
which  one  to  feature,  and  as  a  result  had  not  featured  any. 
He  promised  to  throw  out  the  other  lines  and  keep  only  Huyler's. 

A  dealer  in  Atlantic  City,  located  on  the  boardwalk,  offered 
to  feature  Huyler's  candy  exclusively  if  he  were  given  a  con- 
tract for  the  entire  boardwalk,  figuring  that  the  advertising  of 
Huyler's  would  bring  him  enough  trade  to  make  up  for  the  loss 
in  the  other  lines. 

Makers  of  Huyler's  claim  they  are  able  jto  get  greater  co- 
operation from  dealers  by  this  system.  The  dealers  are  glad  to 
use  window  displays,  etc. 

Peculiar       ^^  ^^^  grocery  line  there  are  few  exclusive  agencies 

Situation  offered.    The  groceries  are  of  such  a  nature  that  an 

*"  F^7f^  exclusive  agency  would  be  at  great  disadvantage  to  the 

^^^     manufacturer. 

I  was  talking  to  the  advertising  manager  of  a  nationally 
known  grocery  product.  He  told  me  that  his  house  never 
even  thought  of  limiting  agencies  to  its  product,  because  the 
output  in  that  line  was  so  large  that  no  matter  how  great  the  ef- 
forts of  these  agencies  would  be  they  could  not  equal  the  sales 
required  for  the  amount  of  advertising  done  and  would  soon  limit 
the  distribution. 

I  asked  F.  W.  Nash,  of  Arbuckle  Brothers,  who  has  been  in 
charge  of  the  interesting  Yuban  campaign:  "Do  you  think  the 
grocery  products  manufacturer  gets  any  benefit  from  an  exclu- 
sive agency?" 

"No,"  he  replied.  "I  think  the  manufacturer  who  is  spend- 
ing his  money  in  national  advertising  is  limiting  distribution 
by  using  the  exclusive  agency  and  is  not  getting  the  value  out  of 


RETAILER  AND  NATIONAL  ADVERTISING    179 

it.  Not  only  that,  but  in  limiting  his  distribution  to  exclusive 
agencies  he  arouses  the  animosity  of  the  other  dealers  so  that 
they  get  a  competing  brand.  As  a  result  one  dealer  is  pushing 
your  product  and  nine  dealers  are  *  knocking '  it.  Even  if  the  ex- 
clusive agent  uses  his  greatest  efforts  in  pushing  your  product  it 
does  not  offset  the  other  nine.  A  live  retailer  cannot  confine  his 
efforts  to  one  brand.  He  mvM  meet  competition.  And  any  Um- 
itation  that  tends  to  prevent  his  doing  so  in  the  most  effective 
way  will  not  result  to  his  benefit,  and  will  come  to  be  so  regarded 
by  him  in  time.  Hence  the  exclusive  distributor  is  a  makeshift 
and  necessarily  a  stopgap  at  best  as  a  general  proposition.  The 
kernel  of  this  dealer  nut  is,  after  all,  salable  goods  that  move 
freely  with  a  satisfactory  profit  irrespective  of  exclusive  control. 
Were  it  not  for  price-cutting,  the  exclusive-control  idea  would 
soon  die  a  natural  death.  Furthermore,  such  protection  to  profits 
as  exclusive  control  gives  a  retailer  is  usually  more  than  offset  by 
lack  of  volume  in  sales  of  comparatively  miknown  goods  of  this 
class,  and  numerous  actual  experiments  by  retailers  have  demon- 
strated to  their  satisfaction  the  better  net  profits  in  the  larger 
turnover  of  well-advertised  fines." 

In  the  drug  fine  I  find  that  the  agency  is  a  much-sought-after 
proposition  by  the  small  dealer.    He  figures  that  with  every 

agency  he  gets  a  lot  of  advertising  free  which  helps 

Dem^ein  ^^°^  ^  ^^^  ^^^^   merchandising.     A   strong  reason 

Drug  Field  Y^^V  ^^^  druggist  favors  the  agency  is  because  there 

is  always  a  tendency  on  the  part  of  the  firm  which  ex- 
tends these  agencies  to  maintain  the  price,  and  this,  to  the  dealer, 
is  the  greatest  thing  you  can  do  for  him,  because  in  the  drug  line 
price  maintenance  is  merely  talk.  Very  few  articles  in  the  drug 
line  have  been  able  to  withstand  the  slasher's  knife.     .     .     . 

In  the  drug  fine  most  of  the  manufacturers  who  seek  exclusive 

agencies  with  the  dealers  are  those  who  are  just  starting  business. 

Good      ^^  those  who  haven't  the  money  to  spend  in  national 

at  StaH    advertising;  but  this  is  not  true  of  the  Nyal  line,  which 

is  put  up  by  the  New  York  &  London  Drug  Company. 
This  line  consists  of  over  150  preparations.  Strictly  speaking, 
this  is  not  an  exclusive-agency  proposition,  but  the  agencies  are 
given  only  to  the  best  dealers  in  each  territory.  The  Eastern 
manager  of  the  company  told  me  that  it  owes  the  success  of  its 
business  to  this  agency  proposition.  By  this  method,  it  is  said, 
the  company  has  been  able  to  obtain  the  co-operation  of  over 
16,000  druggists  all  over  the  country,  so  that  instead  of  the 


180    RETAILER  AND  NATIONAL  ADVERTISING 

Nyal  line  being  a  secondary  consideration  with  the  druggists, 
it  is  a  primary  one,  and  is  featured  to  the  exclusion  of  others, 
and  is  at  the  same  time  a  factor  in  discouraging  the  so-called 
private  brand  among  dealers. 

"For  instance,    said  this  manager,  "in  a  city  like  New  York 
we  have  over  400  dealers  handling  our  line.     It  is  more  to  our 
.  advantage  to  have  these  400  dealers  handle  our  line  f uU- 

^^^^  heartedly  than  to  have  1,000  others  who  would  merely 
handle  the  line  as  a  secondary  consideration.  Of  course, 
we  can  at  any  time  increase  the  number  of  dealers  in  each  sec- 
tion if  we  desire,  but  before  doing  so  we  always  consult  the  Nyal 
dealer  who  handles  the  line  near  where  we  think  of  putting  in  an 
agency.  If  he  says  he  doesn't  want  it  in  there,  then  we  obey 
his  orders.  Sometimes  one  dealer  will  ask  for  an  agency  for 
his  friend  who  is  near  him,  claiming  that  his  trade  will  not  be 
interfered  with.  It  happened  some  time  ago  that  a  certain 
dealer  called  up  for  our  goods.  We  had  not  been  selling  that 
dealer  any  goods  at  all,  so  we  had  to  turn  down  his  order. 
The  following  day  our  Nyal  agent  in  that  territory  called  up 
for  the  same  goods.  We  asked  him  if  the  order  was  for  the 
other  dealer  and  he  said  it  was  and  that  he  had  no  objection  if 
the  man  kept  Nyal  goods,  because  he  knew  that  it  would  not 
interfere  with  his  line. 

"In  small  towns  we  use  our  discretion  as  to  the  number  of 
dealers  who  will  carry  our  line,  and  we  often  find  that  one  live 
dealer  in  a  town  will  be  equal  to  four  dealers  who  will  not  push 
our  goods  in  the  manner  we  wish.  Taking  all  this  into  considera- 
tion, we  find  that  nearly  all  the  dealers  we  approach  with  the 
exclusive  agency  favor  it.  This  applies  to  every  line  of  mer- 
chandise which  can  be  sold.  They  all  claim  that  the  advantages 
exceed  the  disadvantages,  and  many,  knowing  they  are  at  the 
mercy  of  the  manufacturer,  are  still  willing  to  take  that  chance 
as  long  as  they  can  get  it." 

Robert  Tinsman,  President  of  the  Federal  Advertising  Agency, 

had  this  to  say  about  the  exclusive  agency:  "Exclusive  articles, 

Eow  Ad'  exclusive  by  nature  and  appeal,  such  as  cloaks,  suits, 

tertiging  millinery,  furniture,  require  exclusive-agency  repre- 

Agency    sentation  to  secure  proper  featuring  by  the  retail 

Man  L)oks  merchant.    If  an  exclusive  article  is  not  merchandised 

f  ^'      in  this  way  the  result  will  be  that  it  loses  its  individ- 

uality  and  distinctiveness. 

"It  must  be  remembered  that  no  exclusive  agency  can  exist 


RETAILER  AND  NATIONAL  ADVERTISING    181 

without  mutual  advantage  existing  between  manufacturer  and 
merchant.  It  must  be  good  business  for  the  merchant  to  feature 
this  line  as  an  exclusive  proposition  which  affords  him  enough 
profit  to  permit  this  monopoly  of  that  place  in  his  store.  If  this 
law  is  not  observed,  then  the  exclusive  agency  will  not  exist, 
and  a  case  in  point  is  Holeproof  hosiery,  which  became  a  general 
proposition  after  it  was  started  as  an  exclusive  proposition. 

"An  article  of  general  appeal  like  Kayser  gloves  should  be 
sold  through  all  stores,  as  an  exclusive  agency  would  not  permit 
sufficient  featuring  by  any  one  merchant  to  satisfy  the  manu- 
facturer. 

"I  think  this  entire  subject  can  be  covered  by  the  statement 
that  exclusive  articles  require  an  exclusive  agency,  and  an  article 
of  general  use,  with  nothing  exclusive  in  its  nature  or  appeal, 
requires  general  distribution.  An  exclusive  agency  for  an  arti- 
cle of  general  demand  is  a  very  expensive  thing  for  the  manu- 
facturer, because  it  invites  substitution.  If  your  wife  wants  to 
buy  a  pair  of  Onyx  silk  hose  she  may  ask  for  them  in  a  store,  but 
if  they  have  other  silk  hose  that  look  as  good  at  a  little  lower 
price,  she  may  very  likely  accept  them  instead  of  going  out  of 
her  way  to  find  a  store  that  carries  Onyx.  On  the  other  hand, 
if  it  is  a  coat  or  suit  which  she  is  about  to  purchase,  which  in- 
volves a  considerable  outlay,  she  is  very  willing  to  go  some  dis- 
tance to  get  a  garment  that  is  guaranteed  for  two  seasons'  wear. 
There,  you  see,  the  manufacturer  who  has  a  general  article  with 
an  exclusive  agency  is  the  big  loser,  which  fact  does  not  apply 
to  the  manufacturer  who  has  the  exclusive  article,  and  therefore 
an  exclusive  agency. 

**  Experience  has  proved  that  the  exclusive  article  with  a  repu- 
tation established  by  years  of  advertising  can  outsell  the  unes- 
tablished  article  of  even  superior  superficial  attraction  in  the 
eyes  of  the  most  persistent  shoppr.  It  is  the  reiteration  of  the 
quality  arguments  of  the  advertised  article  on  the  consciousness 
of  the  shopper  which  does  the  work,  despite  her  shopping  in- 
stinct, and  brings  her  back  to  the  exclusive  agency  for  the  ad- 
vertised brand." 

The  Mark  Cross  people,  who,  up  to  a  short  time  ago,  sold 
their  line  through  exclusive  agencies,  have  now  changed  their 
selling  plan  and  are  supplying  all  dealers  who  can  handle  their 
line.  P.  F.  Murphy,  president  of  the  company,  said  that  the 
reason  they  had  to  change  their  policy  was  because  their  line 
was  so  large  they  found  that  very  few  dealers  could  handle  it. 


t 


)8«    RETAILER  AND  NATIONAL  ADVERTISING 

"For  instance,"  he  said,  "our  fonner  agent  in  Chicago  is  merely 
a  haberdasher.  While  he  could  handle  a  great  part  of  our  line, 
still  he  could  not  carry  one  of  our  most  important  items,  which 
is  ladies*  gloves.  The  same  would  apply  to  a  jeweler  who  could 
not  handle  some  items  on  account  of  the  nature  of  his  business. 
With  our  new  system  we  will  be  able  to  sell  to  everybody  and 
also  to  app)eal  to  certain  dealers  who  can  handle  only  certain 
articles  of  our  line." 

Mr.  Murphy  laid  special  stress  on  the  fact  that  as  a  general 
rule  a  merchant  with  an  exclusive  agency  becomes  so  siu^  that  a 
customer  cannot  go  to  any  other  store  and  buy  the  line  that  he 
grows  lax  and  makes  no  effort  to  push  the  exclusive  article. 

While  this  may  be  particularly  true  in  Mr.  Murphy*s  case, 
still  in  my  experience  I  have  found  that  whenever  a  dealer  gets 
a  chance  for  an  exclusive  agency  he  used  his  greatest  efforts  to 
increase  his  sales  owing  to  the  margin  of  profit  there  is  in  it  for 
him. 


CHAPTER  VI 

THE   DEPARTMENT   STORE   AND   NATIONAL   ADVERTISING 

IS  THERE  any  inherent  reason  why  the  interests  of  the  de* 
partment  store  and  the  national  advertiser  should  conflict? 
There  are  both  department-store  men  and  national  ad- 
vertisers who  conscientiously  think  there  is.  There  are  others 
who  do  not.  There  are  department  stores  which  virtually  refuse 
to  handle  any  branded  articles  unless  they  themselves  control 
the  brand.  There  are  others  who  make  a  feature  of  carrying 
branded  goods  and  advertise  them  as  they  would  their  own.  On 
the  other  hand,  there  are  national  advertisers  who  believe  depart- 
ment stores  ought  to  be  driven  to  handle  their  goods,  while 
others  believe  they  can  be  led  into  it. 

The  kernel  of  the  department  store  as  an  advertiser's  prob- 
lem is  the  fact  that  the  department  store  gets  its  main  advan- 
tages as  a  retailer  from  its  power  and  skill  as  a  buyer.  And  it 
is  not  always  to  the  interest  of  the  national  advertiser's  plans 
for  building  up  the  widest  possible  distribution  to  give  to  the 
department  store  as  much  of  an  advantage  in  its  buying  as  it 
believes  itself  to  be  entitled  to.  Again,  it  is  to  the  interest  of 
the  department  store  to  keep  itself  as  independent  as  possible 
in  planning  its  purchases  and  in  "  developing  its  sources."  Many 
buyers  for  department  stores  object  to  pushing  nationally  ad- 
vertised goods  because  they  believe  the  building  up  of  a  sale  for 
these  goods  curtails  this  independence. 

There  is  abundant  evidence  that  the  question  of  the  relations 
between  the  national  advertiser  and  the  department  store  and 
the  public,  while  it  is  a  critical  one,  is  gradually  working  toward 
solution.    It  is  a  safe  prediction  that  neither  the  national  ad- 

183 


184 


THE  DEPARTAIENT  STORE 


vertiser  nor  the  department  store  will  be  annihilated,  but  both 
may  be  obliged  to  somewhat  modify  their  present  attitude 
toward  each  other.  In  order  to  trace  the  developments  of  the 
past  year,  suppose  we  look  first  at  what  the  department-store 
problem  really  is,  and  then  at  some  of  the  steps  which  have  been 
taken  toward  its  solution. 

(1)    WHAT  IS  THE  DEPARTMENT-STORE  PROBLEM? 

Edward  Mott  Woolley  describes  the  main  features  of  the  de- 
partment-store problem  in  the  following  terms: 

*When  the  hot  weather  came  on  last  May  a  New  York  man 
awoke  to  the  need  of  some  light-weight  unden\^ear.  He  went 
to  a  department  store  and  inquired  for  a  nationally  advertised 
brand.  He  had  never  worn  these  goods  before,  but  the  adver- 
tising had  got  hold  of  him. 

Yes,  the  store  had  them.  He  gave  his  size,  ordered  two  sets  with- 
out bothering  to  examine  them  closely,  and  went  back  to  his  office. 

Next  morning,  when  he  dressed,  he  discovered  that  one 
of  the  garments  had  legs  that  came  to  his  ankles;  the  legs  of 
the  other  garment  came  barely  to  his  knees. 

"Darn  that  store!*'  he  said.  "Why  didn't  the  clerk  ask  me 
what  length  I  wanted  in  legs?" 

This  sort  of  thing  happens  constantly  in  department  stores, 
where  branded  goods  are  not,  as  a  rule,  handled  with  the  same 
efficiency  that  is  given  them  in  smaller  shops.  The  customer 
gets  wrong  sizes,  wrong  patterns  and  colors,  styles  that  are 
unsuitable  for  the  particular  use  desired,  and  "seconds"  that 
are  sold  at  a  reduced  price  but  without  any  reference  to  the 
inferiority  of  the  goods.  The  result  is  that  branded  goods  often 
get  a  black  eye  at  the  very  place  where  they  ought  to  receive 
an  introduction  to  their  biggest  markets. 

This  situation  suggests  the  present  article,  which,  however, 

is  not  primarily  an  article  on  selling,  but  on  the  organization 

of  department  stores.     If  manufacturers  of  branded 

i^To^'  Soods  reaUzed  more  fully  the  complications  and  im- 

ganization  perfections  of  such  great  selling  organizations,  they 

might  be  able  to  devise  better  methods  of  co-operation 

for  the  sale  of  nationally  advertised  goods. 

^Printers"  Ink,  August  6,  1914,  p.  8. 


THE  DEPARTMENT  STORE 


185 


Incidentally,  they  might  perhaps  help  department  stores  to 
improve  the  all-around  efficiency  of  clerks.  A  manufacturer 
who  can  perform  such  a  service  for  a  store  will  surely  put  his 
own  goods  on  a  better  foundation. 

Retail  distribution  is,  in  truth,  an  art  that  is  still  crude. 
To  a  lesser  degree,  the  same  thing  applies  to  wholesale  dis- 
tribution. In  merchandising  volume  has  developed  faster 
than  the  real  science  of  it.  Most  department  stores  have 
evolved  and  charted  an  outward  form  of  organization,  but  in 
almost  every  pyramid  of  such  a  chart  you  will  find  a  lack  of 
those  refinements  that  mark  the  better  class  of  manufacturing 
organizations  of  to-day.  There  are,  of  course,  some  ex- 
ceptions.    ... 

In  well-organized  department  stores  the  detail  is  classified 
and  distributed.  In  one  large  Eastern  store,  where  I  spent 
several  days  studying  the  workings  of  the  organization,  the 
general  manager  has  under  him  five  executives  of  co-ordinate 
authority.  Each  of  them,  too,  is  a  vice-president  and  stock- 
holder. Thus  the  big  merchandising  train  is  run  in  five  sec- 
tions. 

The  members  of  this  managing  board  of  five  vice-presidents 
do  not  take  orders  from  each  other,  nor  do  they  take  orders,  in 
the  ordinary  sense,  from  the  general  manager.  In  matters  re- 
quiring special  authority  they  get  their  powers  from  an  execu- 
tive committee.  And  tlais  conunittee  is  made  up  of  themselves. 
They  meet  at  frequent  intervals — every  afternoon  during  busy 
periods — and  take  up  such  matters  as  are  presented  to  them  in 
typ)ewritten  memoranda. 

The  general  manager  may  or  may  not  attend  these  meetings, 
but  the  results  of  them  are  passed  up  to  him.  He  has  the 
veto  power,  but  only  two  or  three  times  in  three  years  has  he 
used  it. 

The  president,  who  really  stands  on  the  same  plane  as  the 

general  manager  and  the  treasurer — ^just  one  notch  higher  than 

the  managing  board  of  five — rarely  interferes,  but 

S5L<'   <l®votes  himself  to  great  creative  policies,   and  to 

^Power  *  studying  the  complex  subject  of  merchandising, 
a  subject  which  few  merchants  have  really  gone 
into  in  a  scientific  way.  But,  naturally,  his  researches  and 
original  ideas  have  a  strong  influence  on  the  daily  operations 
of  the  store.  In  fact,  he  has  evolved  and  put  into  words 
what  is  probably  the  most  minute  and  complete  system  of 


\i 


186 


THE  DEPARTMENT  STORE 


merchandising  ever  devised.     In  its  larger  aspects  it  is  a  sort 
of  philosophy  of  retail  distribution. 

Consider,  briefly,  the  duties  of  these  five  executives  under  the 
general  manager. 

Take  the  store  manager  first.  He  pulls  the  first  section  of 
the  train.  The  cars  of  his  section,  if  strung  along  in  a  row, 
would  be  labelled  in  part  something  like  this: 

Operation,  Selling,  Expense,  Employees,  Deliveries,  Educa- 
tion, Protection. 

In  other  words,  he  has  charge  of  the  physical  operation  of  the 
plant.  Under  him  is  the  superintendent,  the  floor  superintend- 
ent, and  the  clerks,  messengers,  wrappers,  and  so  on.  The  de- 
livery department  is  under  him,  the  mail-order  department,  the 
work  of  marking  goods.  He  controls  the  building  itself  and 
the  supplies.  Furthermore,  he  plans  the  settings  for  all  the 
special  sales  and  various  store  events.     .     .     . 

The  second  section  of  the  department-store  train  is  hauled 

by  the  merchandise  manager  for  women's  goods. 

Who  the       ^^^^  executive,  being  relieved  from  all  detail  of 

Merchan-  plant  operation — except  the  larger  matters  that  come 

dise  Man-  before  him  as  a  member  of  the  executive  committee — 

ogerfar    has  free  swing  with  the  merchandise  itself.     While 

^^jl  the  store  manager  has  supervision  over  the  routine 

of  selling,  the  merchandise  manager  does  the  higher 

brain  work  of  it. 

What  sort  of  gowns  are  the  women  going  to  wear  the  coming 
season?  Are  capes  going  to  be  popular?  What  quantities 
of  this,  that,  or  the  other  Hue  of  goods  must  be  planned  for? 
How  are  the  lines  going  to  be  divided  and  subdivided  as  to 
grades,  prices,  and  so  on?  How  are  profitable  goods  going  to 
be  worked  in  with  those  not  so  profitable,  yet  necessary  to 
handle?  These  are  just  a  few  of  the  multitudinous  questions 
the  merchandise  man  must  answer,  almost  always  in  advance. 
It  is  the  merchandise  manager,  too,  who  puts  on  the  pressure. 
A  year  ago  this  month  the  glove  department,  say,  sold  goods  to 
the  extent  of  $12,000.  This  year  he  says : 
"We  must  sell  $15,000." 

He  does  some  calculating  and  finds  that  his  average  daily 
sales  of  gloves,  counting  out  Sundays  and  holidays,  must  be 
^^,  First  he  tells  the  store  manager,  and  this  executive 
prepares  to  stiffen  up  his  speed  a  Kttle.  The  efficiency  of  clerks 
must  be  kept  from  falhng  off.     ,     .    . 


THE  DEPARTMENT  STORE 


187 


As  the  month  progresses  the  clerical  force  keeps  a  daily 

record  of  glove  sales.     Not  only  that,  but  the  merchandise 

manager  has  before  him  a  daily  sheet,  of  immense 

^Tf^     proportions,  showing  the  fluctuations  of  all  conditions 

of  i^aies     |^g^j.-^g  ^j^  ^^Q  ^bo^e  department— and  on  all  other 

departments,  too,  each  by  itself. 

The  glove  records  show,  for  instance,  the  actual  daily  average 
of  gloves  sold  to  date;  the  daily  average  to  the  corresponding 
date  of  the  preceding  year;  the  actual  sales  in  the  aggregate, 
during  the  month,  to  date,  and  the  same  for  the  preceding  year; 
the  mark-downs  for  the  month;  the  goods  delivered  into  stock, 
the  planned  per  cent,  of  mark-up;  the  per  cent,  of  mark-up  on 
goods  deUvered  into  stock  to  date;  stock  on  hand  each  day; 
planned  stock  to  be  on  hand  at  end  of  the  month;  quantity  of 
goods  "open  to  buy"  each  day,  and  so  on.     ... 

Now,  if  you  were  to  string  out  in  a  line  all  the  figurative  cars 
pulled  by  a  merchandise  manager  in  his  section  of  the  depart- 
ment-store train,  you  would  have  a  showing  more 
Each  Buyer  ^j,  j^gg  {[^^  this— although  there  is  a  great  variation 
Department  i"  the  detail  of  organization  among  different  depart- 
ment stores: 

Buyers  or  Department  Managers,  Assistant  Buyers,  Heads 
of  Stock,  Goods,  Resources,  Profits,  Shopping,  Bargain  Base- 
ment. .  , 

The  buyers  are  really  merchandise  managers  in  a  lesser  degree. 
Each  buyer  has  his  own  department  to  pull.  He  is  a  sort  of 
Pullman  conductor  of  one  car.  But  he  doesn't  have  the  loafing 
job  that  the  real  Pullman  conductor  has. 

When  he  starts  in,  the  merchandise  manager— who  has  pre- 
viously worked  out  the  detailed  scheme  for  all  the  departments 
—allots  him  a  certain  area  of  floor  space.  On  this  he  is  charged 
rent,  light,  heat,  and  a  pro  rata  of  general  expense  all  through. 
Then  he  gets  a  certain  sum  as  capital. 

"Go  ahead,"  says  the  merchandise  manager,  "and  make  some 
money  for  the  store  and  for  yourself.  You  are  really  in  busmess 
for  yourself— only  in  some  ways  you  are  tied  up  to  me  and 
mustn't  try  to  break  loose.  I'm  the  man  who  ties  all  the  de- 
partments together."  *  i  u 

Thus  all  the  buyers  make  up  a  big  group  of  merchants,  each 
running  his  own  store,  so  to  speak.  It  would  be  pretty  nearly 
the  same  thing  if,  instead  of  having  all  the  departments  under 
one  roof,  each  was  a  separate  store  by  itself,  under  a  central 


188 


THE  DEPARTMENT  STORE 


■i 


management—only  in  such  case  the  expenses  would  be  very 
much  heavier. 

Buyers  usually  get  salaries  and  commission.     Salaries  run 

from  $2,500  or  less  up  to  $35,000  or  more.     Perhaps  they  aver- 

WkM      ^^^  between   $5,000  and   $10,000.     Buyers  are  ex- 

Buyers  P^*^^  «*ch  year  to  show  a  gain  in  sales  over  those  of 
Emm  the  year  preceding.  A  buyer  who  stands  still  isn't 
a  good  buyer.  If  he  gains  $200,000,  as  the  buyer  in  a 
furniture  department  did  last  year,  he  may  get,  as  this  buyer 
did,  a  commission  of  3  i)er  cent.,  or  $6,000.  With  his  salary, 
he  earns  $15,000  or  more.  In  addition,  he  gets  a  commission  on 
the  total  annual  gain  for  the  whole  store.  This  is  a  broad  in- 
centive to  help  along  aU  departments.     .     .     . 

The  heads  of  stock  are,  in  some  degree,  buyers  in  theory  if 
not  in  fact.  Their  detailed  knowledge  of  markets  and  goods 
enables  the  buyers  to  measure  the  demands  and  shape  their 
policies. 

Jump  along  now  to  the  third  section  of  our  hypothetical  mer- 
chandise train.  In  this  particular  instance  it  is  hauled  by  the 
merchandise  manager  for  men's  goods.  His  duties  are  identical 
with  those  of  the  merchandise  manager  just  discussed,  so  we 
can  skip  him. 

The  fourth  section,  however,  comprises  quite  another  field  of 
activity.     This  section  is  headed  by  the  publicity  man. 

In  most  department  stores  this  executive  is  under 

Ara?I*X- ^^^.*^^"*^^  ?^  ^*^^  merchandise  manager— and  oidi- 
laHon  to    warily  there  is  only  one  merchandise  manager.     But  in 
Others     the  store  in  question  the  publicity  man  is  just  as  inde- 
pendent as  any  other  member  of  the  board  of  managers. 
He  conducts  the  advertising  department  without  being  domi- 
nated by  the  over-enthusiasm,  perhaps,  of  his  associates,  the 
merchandising  men. 

One  day,  for  instance,  some  advertising  copy  came  to  him,  the 
substance  of  which  had  been  furnished  by  the  buyer  in  charge  of 
leather  novelties  and  passed  by  the  merchandise  manager.  The 
publicity  man  scanned  it  and  sent  it  back  to  the  place  where  it 
came  from. 

"You  are  too  extravagant  in  your  claims  for  these  handbags," 
he  said.     "Tone  down  the  copy  in  such-and-such  respects." 

Again,  some  neckwear  copy  came  up  wreathed  in  a  halo  of 
admiration  for  the  neckwear. 

"It's  all  right  to  admire  your  own  stuff,"  said  the  publicity 


THE  DEPiVRTMENT  STORE 


189 


man,  after  he  had  sent  a  couple  of  experts  to  report  on  the  goods, 
"  but  please  be  sure  you  are  telling  the  literal  truth.  This  store, 
you  know,  stands  by  the  *  money  back'  principle  to  the  limit,  and 
we  don't  want  to  make  rash  statements  that  we'll  have  to  eat 
later  on." 

The  publicity  man  also  has  charge  of  window  displays.  He 
has  a  wide  vision  in  this  and  in  all  forms  of  publicity,  and  he 
stands  ready  to  give  such  special  help  to  any  department  as  the 
good  of  the  whole  store  demands. 

The  fifth  and  last  section  is  made  up  of  the  comptroller's  de- 
partment. Here  are  the  cars  as  they  stand  lined  up  ready  for 
their  daily  run: 

Accountant,  auditor,  credit  manager,  cashier,  correspondent, 
librarian. 

Thus  we  have  our  department  store  pretty  well  classified  into 

its  components.     But  we  have  seen,  too,  that  mere  classification 

doesn't  constitute  true  organization.    You  can  sepa- 

^^' .  rate  men  into  groups  and  put  each  group  into  its  groove 
Wh^ls  Go  *^^  ^^^^  ^^®  ^^^^^  won't  grow  very  fast.     The  thing 

Bjound  that  brings  rapid  growth  is  usually  that  inner  organiza- 
tion that  stimulates  all  the  groups  with  a  common 
incentive. 

Perhaps  I  can  make  this  still  clearer  with  another  example. 
A  large  annual  sale  was  being  planned,  and,  according  to  rule, 
the  store  manager  made  his  plans  for  it  and  put  them  into  type- 
writing and  charts.  These  he  submitted  to  the  executive  com- 
mittee, of  which  he  was  one.  The  two  merchandise  managers, 
the  publicity  man,  and  the  comptroller  also  submitted  their 
plans  in  typewritten  form.  Thus  all  phases  of  the  sale,  and  the 
store  activities  connected  with  it,  were  harmonized  and  put  into 
one  plan.  Instead  of  hiring  1,200  extra  employees,  as  the  store 
manager  had  planned,  1,000  were  able  to  do  the  work.  This 
was  merely  one  result. 

No  executive  or  employee  is  permitted  to  move  in  his  or  her 
orbit  alone.  In  carrying  this  principle  down  to  the  sales  force, 
the  store  conducts  an  elaborate  system  of  instruction,  which, 
while  theoretically  under  the  direction  of  the  store  manager,  is 
really  conducted  by  all  the  higher  executives  and  buyers.  There 
is  a  school  that  teaches  store  salesmanship,  along  with  its  allied 
branch — ^a  knowledge  of  the  goods  the  store  sells.  All  clerks 
work  on  a  salary  and  commission. 

Now  what  bearing  has  all  this  on  the  manufacturer?    What 


r 


190 


THE  DEPARTMENT  STORE 


can  he  gain  by  a  knowledge  of  department-store  organization — 
or  lack  of  it,  as  is  often  the  case? 

Well,  one  very  important  thing  he  can  learn  is  that  goods,  as  a 

rule,  don't  sell  themselves.     He  can  learn  that  co-operation  in  a 

department  store  is  the  thing  that  gives  sales  the  great- 

Brand^^^^  impulse.     It  follows,  then,  that  any  co-operation 

Qof^  f    he  himself  can  give  a  store  will  help  his  own  sales. 

Many  department  stores,  as  manufacturers  well 
Imow,  dislike  to  handle  branded  goods  because  the  visible  profit 
is  less.  It  is  not  easy,  therefore,  to  force  co-operation.  Prob- 
ably this  is  the  reason  why,  in  many  cases,  no  attempt  has  been 
made  to  do  it. 

The  manufacturer  of  a  certain  branded  article  had  long  paid 
little  attention  to  department  stores.  They  handled  his  goods 
in  a  perfunctory  way,  but  buyers  sidetracked  his  article  when- 
ever possible  and  clerks  were  instructed  to  substitute  unbranded 
goods  when  it  could  be  done  readily.  All  the  manufacturer  5 
arguments  to  the  department-store  buyers  seemed  useless. 

Finally  an  advertising  agent  said  to  this  manufacturer: 

"You  have  been  working  on  the  principle  that  the  buyer  is  the 
whole  thing.  Change  your  tactics  and  get  after  the  merchandise 
manager.  Ask  him  to  let  you  put  on  a  little  series  of  motion- 
picture  lectures  to  clerks,  descriptive  of  your  goods,  the  way  they 
are  made,  their  points  of  excellence,  and  so  on.  Don't  knock 
anybody,  but  do  some  real,  constructive,  educational  work  on 
the  clerks." 

To  the  manufacturer's  surprise,  the  merchandise  managers 
proved  far  more  receptive  than  the  buyers  had  been.  Sales 
through  department  stores  increased  quite  notably,  and  gave 
evidence  of  large  possible  growth  in  the  future. 

This  suggests,  perhaps,  the  possibility  of  co-operation  among 
nianufacturers  of  different  lines  of  branded  articles  for  the  exhi- 
bition of  series  of  motion  pictures  to  department-store  clerks. 
And,  carrying  the  thing  out  logically,  why  not  motion  pictures 
for  the  buyers?  At  least  these  executives  might  have  special 
invitations. 

"  I  should  not  have  any  objection  to  various  series  of  motion 
pictures  presented  by  half  a  dozen  or  more  manufacturers,  in  a 
combination  for  that  purpose,"  says  one  merchandise  manager. 
"But  of  course  I  should  not  want  a  lot  of  scattering  motion-pic- 
ture shows,  taking  up  a  great  deal  of  time.  Incidentally,  there 
is  opportunity  for  manufacturers,  in  giving  such  exhibits,  to 


THE  DEPARTMENT  STORE 


191 


The  Profit 
on  Trade- 
marked 
Goods 


work  in  a  little  general  salesmanship  stuff.  In  fact,  I  have  been 
thinking  myself  of  giving  our  clerks  some  pictures  of  that  sort." 
Perhaps  there  is  something  of  a  field  here  for  a  man  of  creative 
tendencies  to  do  some  good  work  posing  salesmanship  pictures. 
In  other  ways,  too,  a  knowledge  of  department-store  organi- 
zation suggests  lines  of  attack.  Take,  for  instance,  the  depart- 
ment of  profits,  which  usually  comes  under  the  di- 
rection of  the  merchandise  manager. 

In  one  great  department  store  that  I  know  about 
profits  are  analyzed  down  to  the  last  refinement. 
Practically  every  counter  tells  its  own  story.  Mer- 
chandise is  departmentized  in  tv/o  or  three  times  the  detail  that 
it  is  in  most  stores.  ,    , 

In  the  average  department  store,  however,  it  is  customary  to 
lump  several  lines  of  goods,  often  many  of  them,  and  reckon 
profits  on  the  whole  lot.  Such  stores  can  tell  the  gross  profit  on 
any  fine  of  branded  goods,  but  not  the  actual  net  profit. 

Often  in  the  handling  of  nondescript  goods  there  is  a  heavy 
cost  of  refilling  unsatisfactory  orders,  patching  up  complaints, 
and  things  of  that  sort.  I  know  of  stores  where  the  cost  of  the 
adjustment  department  is  charged  to  general  expense.  How 
much  of  it  ought  really  to  belong  to  unreliable  goods  which  os- 
tensibly show  a  better  profit  than  some  branded  goods  do? 

Then  small  consideration  is  often  given  in  department  stores 
to  the  indirect  benefits  of  handling  and  pushing  branded  goods. 
One  department-store  proprietor,  however,  said  to  me: 

"I  find  branded  goods  the  best  business  getters  I  have.  I 
always  display  them  and  emphasize  them  in  every  way  possible. 
They  give  my  store  a  prestige  and  a  caste  that  I  can  get  in  no 
other  way.  It  is  like  surrounding  myself  with  a  company  of 
brilliant  and  distinguished  people.  Then  the  standardized 
price  of  such  goods  makes  it  easy  to  sell  them." 

This  merchant  started  only  a  few  years  ago  with  a  tiny  store, 
and  now  does  a  business  of  $500,000  a  year— a  small  department 
store  yet,  but  showing  a  remarkable  development.  He  has 
modelled  his  organization  as  closely  as  possible  to  the  best  types 
in  department  stores. 

All  of  which  hints  at  arguments  which,  if  persistently  used, 
cannot  help  but  have  some  effect. 

Still  another  benefit  to  be  gained  from  a  more  intimate  knowl- 
edge of  department-store  methods  is  this:  Anything  that  helps 
the  store  give  the  public  real  service  will  ultimately  find  its  way 


m 


THE  DEPARTMENT  STORE 


into  the  good  graces  of  department-store  managers.  Take  corsets 
for  instance.  Here  you  see  some  examples  of  really  fine  work 
on  the  part  of  manufacturers  of  branded  goods.  In  some 
department  stores  the  corset  saleswomen  are  trained  and 
drilled  by  representatives  of  the  manufacturer.  Without  such 
trained  saleswomen  it  would  have  been  impossible  to  introduce 
some  of  the  higher-priced  corsets  that  now  have  large  sales. 

Many  manufacturers  spend  large  sums  in  dealer  work  of 
various  kinds,  but  devote  their  attention  mostly  to  the  smaller 
retail  stores.  In  the  department  stores  there  is  a  large  and  highly 
specialized  field  for  this  sort  of  thing  that  has  scarcely  been 
touched.  One  can  scarcely  go  into  a  department  store  without 
realizing,  often  with  indignation,  the  crudeness  of  things  and  the 
apparent  indifference  of  the  manufacturer  to  the  people  who  are 
handling  his  goods. 

A  tour  of  one  large  New  York  store  showed  results  like  these: 

Clerks  handling  a  nationally  advertised  and  rather  compli- 
cated door-spring  who  knew  absolutely  nothing  about  its  princi- 
ples and  could  give  no  advice  as  to  its  various  uses. 

Clerks  selling  a  certain  advertised  brand  of  varnish  who  could 
give  no  information  as  to  its  use  for  specified  purposes. 

Clerks  in  the  refrigerator  section  who  had  no  knowledge  of  the 
points  of  vantage  on  which  a  manufacturing  house  was  basing 
its  advertising.  This  refrigerator  was  on  sale,  but  the  clerks,  on 
being  questioned,  showed  themselves  to  be  mere  blanks. 

Clerks  handling  an  advertised  porch  hammock  who  could  not 
explain  how  the  frame  folded  or  of  what  the  mattress  was  made. 

Clerks  in  the  grocery  department  handling  a  very  largely 
advertised  food  product  put  up  in  glass  jars  who  knew  nothing 
whatever  about  this  manufacturing  house.  They  could  not 
even  tell,  without  looking  at  the  label,  where  it  was  located, 
nor  had  they  any  cUnching  little  arguments  with  which  to  close 
sales. 

This  situation  suggests  to  manufacturers  of  branded  goods  the 
necessity  of  impressing  themselves  more  emphatically  on  the 
great  modem  selling  agency,  the  department  store.  What 
branded  goods  need  is  to  get  deeper  under  the  skin. 

One  of  the  most  pronounced  developments  in  connection  with 
the  working  out  of  the  department-store  problem  is  the  growth 
of  specialty  stores.     In   some  cases  this  takes  the  form  of  a 


THE  DEPARTMENT  STORE 


193 


specialization  of  existing  stores  in  certain  narrow  Imes  and  m 
other  cases  it  takes  the  form  of  specialty  stores  established  to 
form  a  particular  work.  J.  F.  Beale,  Jr.,  Advertising  Manager 
of  Saks  &  Co.,  of  New  York,  formerly  of  R.  H.  Macy  &  Co., 
New  York.,  and  of  Strawbridge  &  Clothier,  Philadelphia,  writes 
as  follows  concerning  what  he  thinks  will  be  the  probable  future 
course  of  department-store  development  in  New  York  City: 

♦If  I  were  a  manufacturer  I  should  do  some  fine  commercial 
detective  work  right  now  in  New  York.  I  ^^^1^/,^"^^ 
which  of  one,  two,  or  three  big  stores  were  most  likely  to 
push  hard  for  leadership  in  the  lines  I  manufactured,  and 
rd  tie  up  very  fast  to  them.      Then  I'd  co-operate,  with  a 

''"There  is  much  speculation  now  in  ever-widening  drcles  as 
to  the  future  of  the  department  store  m  the  United  States  m 
general  and  in  New  York  City  in  particular. 

It  is  a  topic  of  great  interest  to  hundreds  of  manufacturers. 

'X?^'  inK:;>ri:s'a'r:tp(entiful.  abnost,  as  snowflakes 

in  a  blizzard.  .  ..•       .       •      »^^7  :,« 

Unfortunately,  those  who  are  m  a  position  to  give  real  in- 
formation are  strangely  silent.  .  ,  j  •  j  u^^ 
The  spirit  of  uncertainty  and  unrest  cannot  be  denied,  how- 
ever. It  crops  up  continuously;  in  fact,  its  evidences  appear 
with  increasing  frequency.  ,  j-x  j  *««j 
It  is  noticeable  that  merely  in  the  matter  of  credit  and  send- 
ing in  the  market,  houses  always  very  careful  to  discount  their 
biUs  are  jogging  up  the  buyers  to  pass  through  bi  b  even  more 
p^mptly  than  usual  and  goading  their  accounting  forces  to 
bav  "on  the  dot."      They  want  to  take  no  chances  with  that 

^Theytaiow^theb  credit  is  good  and  their  standing  strong,  but 
they  don't  want  to  even  be  discussed  on  these  l'«ies.  In  th^ 
troublous  days  they  realize  that  one  or  two  bjUs  not  d.«30unted 
are  liable  to  be  multiplied  to  one  or  two  hundred    m  the  trade 

and  on  the  street.  ,        ,  ,  ™.rf„;n 

One  big  store  would  like  v«ry  much  to  know  where  a  certain 

*Pnnler>'  Ink,  July  8, 1813.  p.  17. 


194 


THE  DEPARTMENT  STORE 


i  • 


i 

i 

1! 


^1 


. 


rumor,  persistently  current,  originated.     It  credits  the  store 

with  being  eight  to  ten  months  "behind"  in  payments  on  several 

Tai     TfJA  ^^^^  accounts. 

in  the         Another  store   is   suffering  from   the  wndespread 

Trade     report  given  broad  credence,  and  apparently  unde- 

nied,  that  it  lost  $750,000  in  one  year's  trading. 
Another  store  suffers  from  the  report  that  it  cleaned  a  paltry 
$1^,000  on  a  business  of  over  $10,000,000  in  one  year. 

And  so  on  down  the  line.  One  store  is  reported  unable  to  con- 
tinue owing  to  recent  disclosures  and  must  go  out  of  business. 
Vanous  reorganization  schemes  are  proposed,  only  to  meet  with 
opposition.  Apparently  shrewdly  laid  plans  to  rehabilitate  a 
certam  big  New  York  merchant,  whose  great  interests  were 
interwoven  with  Chicago  and  Boston,  do  not  seem  to  come  to  a 
head. 

A  well-known  merchant  of  Brooklyn,  whose  concern  came  to 
be  in  distress,  is  quoted  as  saying  that  if  he  had  $'20,000,000 
capital  and  a  proper  rental  rate  on  the  Sixth  Avenue  stores  that 
have  been  vacated  one  by  one  by  failing  department  stores, 
and  could  reorganize  the  one  big  store  still  remaining  in  that 
district,  he  could  in  a  few  months  show  the  commercial  world 
some  great  things  in  volume  of  business,  merchandising,  quick 
turnovers,  and  big  profits. 

The  owners  of  one  of  the  great  stores  in  New  York  have  been 
so  persistently  connected  with  a  rumor  that  they  were  about  to 
buy  a  big  Brooklyn  store  that  failed  that  they  deemed  it  neces- 
sary to  make  denial.  The  denial,  commented  upon  later  by 
several  very  well-posted  and  prominent  New  York  retailers, 
was  construed  as  having  a  tone  of  **we  have  all  we  can  attend 
to  right  here  just  now,  thank  you!" 

Two  of  the  oldest  department  stores  are  reported  as  consider- 
ing consolidation  to  effect  reduction  of  overhead  and  advertis- 
ing expense  and  fixed  charges. 

A  group  of  men  active  in  the  department-store  and  large  re- 
tail field  were  at  luncheon  at  the  Waldorf  a  short  tune  ago.  It 
was  in  the  latter  part  of  June. 

One  of  these  men,  who  had  seemingly  been  in  a  deep,  brown 
study  for  a  time,  suddenly  looked  up  from  his  plate  and  said: 
Gentlemen,  there  are  nine  of  us  here  and  each  ought  to  be  able 
to  give  me  an  intelHgent  and  dependable  prediction  with  regard 
to  the  department-store  situation  in  New  York.  What  is  the 
future  of  the  department  store?" 


THE  DEPARTMENT  STORE 


195 


i| 


There  was  silence  for  several  moments.    To  the  writer  they 
seemed  very  long  minutes,  indeed. 

Then  one  man  spoke  up.    He  is  not  a  department-store 

man,  though  he  once  was.     His  business,  a  large  and  growing 

Predicts    one,  depends  for  90  per  cent,  of  its  volume  upon  de- 

That  Six  partment  stores  and  the  larger  specialty  shops.     This 

wm  Sur-  is  what  he  said:  "I  believe  that  in  a  few  years,  mind 

^^^      you,  I  say  a  few  years,  there  will  be  in  New  York 

City  not  more  than  six  department  stores,  as  the  name  is  now 

applied,  and  that  their  methods  will  be  greatly  changed  and 

improved  from  the  standpoints  of  advertising  and  merchandise- 

ing  methods,  service,   price-cutting,  the  sale  of  trademarked 

and   proprietary   goods   and   brands,   their   *  overhead,'   their 

methods  of  co-operation,  the  manner  of  their  competition,  and 

the  personnel  of  their  executive  forces,  as  well  as  that  of  the 

rank  and  file.     I  further  believe  that  the  desirable  specialty 

shops,  now  conducted  on  lines  of  high  commercial  principle, 

will  grow  and  their  yearly  profit  increase.     As  for  the  chains 

of  stores— well,  I  am  glad  I  am  in  no  way  concerned  with  their 

multiplying  burdens." 

The  foregoing  is  almost  an  exact  quotation. 

Every  one  at  the  table  listened  intently.    There  was  another 

long  silence.    Then  the  original  questioner  said:  "Mr. has 

expressed  my  own  views  so  concretely  that  I  have  nothing 
further  to  say." 

Turning  to  a  very  successful  and  well-known  advertising  and 
merchandise  manager  for  one  of  the  stores  he  asked:  "What  do 
you  think?" 

"I  thoroughly  agree  with  Mr. ,"  was  the  answer. 

Then  it  developed  that  the  nine  representative  men  were 
unanimously  of  the  opinion  expressed  in  the  above  quotation. 
Some  of  the  men  are  directly  interested  in  the  stores  under  dis- 
cussion, but  which  have  not  been  named  for  obvious  reasons. 

One  man  said  he  desired  to  give  emphasis  to  the  part  refer- 
ring to  the  higher  tone  which  must  pervade  the  personnel  of  the 
management  of  the  big  stores.  As  he  put  it:  "The  word  *  pred- 
atory' must  be  forgotten;  the  big  stores  must  be  managed  by 
merchants,  not  hankers,  by  practical  men,  not  *  relatives,'  recent 
graduates  and  men  of  untried  fitness;  and  tremendous  salaries 
and  big  percentage  *  rake-offs'  must  be  abolished." 

Another  man,  keen  on  the  subject  of  the  development  of  em- 
ployees as  units,  claimed  that  there  will  be  a  decided  advance 


^ 


i 


196 


THE  DEPART>IENT  STORE 


ou  that  line.  He  pointed  out  that  indications  are  not  lacking 
to  prove  that  the  best  merchants  are  giving  much  thought  to 
the  improvement  of  their  service  and  the  decrease  of  waste  and 
error  by  the  development  of  the  individual  worker.     .     .     . 

There  is  going  to  be  an  era  of  fewer  stores  but  better  stores;  an 
era  of  specialization,  rather  than  bigness  and  diversity  of  stocks 

Speciaiiza-  ^^^  ^he  mere  sake  of  "impression.'*     There  is  coming 
Hon,  Rather  an  era  of  greater  honesty  in  advertising  and  merchan- 

Than  Big-  dising;  an  era  of  increased  safety  for  the  consumer. 
"**'  "Overhead,"  so  greatly  increased  during  the  last  dec- 
ade by  the  impositions  of  entertainments,  by  the  abuse  of 
C.  O.  D.'s,  by  credits  and  exchanges  and  by  other  causes, 
will  be  decreased.  Above  all.  High  Principle  will  regain  her 
place  on  the  throne.  We  shall  get  closer  to  the  ideal.  It  must 
be  so. 

Customers  weigh  points  pertaining  to  value  as  well  as  prices. 
Style,  durability,  convenience,  appearance,  newness,  exclusive- 
ness  are  all  important  in  the  eyes  of  the  buyer.  A  store's  real 
growth  and  development  must  come  from  that  satisfaction  of 
customers  which  lasts  when  price  has  been  forgotten. 

Service  must  be  the  aim  of  the  new  kind  of  store,  and  service 
in  its  broad  sense,  the  sense  in  which  the  customer  regards  it, 
is  that  which  effects  genuine  economies  for  the  customer  and 
facilitates  shopping.  True  value  exists  only  where  there  is  the 
proper  relation  of  reasonable  price  and  sound  worth. 

Big  retailers  of  a  certain  calibre  have  been  rocking  the  com- 
mercial boat  at  a  lively  rate  for  some  years  past,  ^veral  dis- 
astrous upsets  and  grave  accidents  of  one  kind  and  another  have 
brought  men  to  their  senses. 

It  will  be  a  great  day  for  the  people,  for  the  managers  and 
owners  of  stores,  and  for  the  manufacturer  when  all  big  stores 
make  their  bid  for  business  on  the  basis  of  building  up  and  keep- 
ing a  clientele^  and  do  not  depend  upon  "sales"  of  questionable 
merit  fast  and  furiously  following  each  other  for  their  trading; 
"sales"  in  the  advertising  of  which  they  juggle  in  the  "values," 
do  high  vaults  over  truth;  flimflam  the  manufacturer  out  of  a 
just  profit;  play  **hob"  with  the  established  trademarked  arti- 
cle of  sound  merit;  take  toll  of  the  employee,  and  end  by  fooUng 
themselves  worst  of  all. 

For  any  one  of  a  hundred  reasons  a  certain  department  may 
pay  in  one  store  and  fail  in  another. 

It  is  only  common  sense  for  a  merchant  to  push  and  develop 


THE  DEPARTMENT  STORE 


19' 


that  in  which  he  seems  to  be  most  successful.  The  day  is  com- 
ing when  the  retailer  will  not  hold  it  as  of  greater  importance 
to  have  a  large  number  of  departments  than  to  conduct  a  less 
number  with  profit  and  satisfaction  to  all  concerned. 

In  other  words,  the  department  store  in  New  York  as  an  in- 
stitution has  not  proved  itself  an  improvement  over  the  specialty 
store.  The  next  few  years  will  see  the  great  stores  specializing 
;nore,  and  the  established  specialty  stores  developing  greatly. 

There  will  be  stores  that  will  achieve  leadership  unques- 
tioned, in  linens;  others  in  home  furnishings;  others  in  apparel; 
still  others  in  piece  goods,  etc.  The  people  themselves  will  help 
to  make  the  condition  and  will  be  glad  to  assist  in  maintaining  it. 

If  these  prophecies  should  come  true  it  seems  probable  that 
even  after  the  specialty  store  development  becomes  a  conspicu- 
ous feature  of  the  manufacturer's  distribution  problem,  many  of 
the  present  aspects  of  the  conflict  between  national  advertisers 
and  department  stores  will  not  be  materially  modified  except 
as  the  organization  and  work  of  the  specialty  houses  may  be 
more  effective  than  is  the  case  in  the  present  larger  and  more 
general  organizations.  The  following  description  of  how  a  large 
specialty  store  attacks  its  advertising  problems  contains  some 
suggestions  which  will  be  of  interest  to  any  one  concerned  in  the 
probable  future  of  national  advertising  in  connection  with  large 
retail  store  outlets.  Louis  E.  Kirstein,  Vice-President  of  Wil- 
liam Filene's  Sons  Company,  Boston,  described  the  advertising 
methods  of  his  store  in  an  address  delivered  on  June  22d  at 
the  Chicago  Convention  of  the  Associated  Advertising  Clubs 
of  the  World: 

*The  chairman  of  the  Retail  Department  of  the  Associated 
Advertising  Clubs  of  the  World  has  succeeded  in  convincing  me 
that  you  would  be  interested  to  hear,  from  the  head  of  the 
publicity  department  of  William  Filene's  Sons  Company,  of 
Boston,  the  aims  and  methods  of  that  publicity  organization. 
1  felt  that  Mr.  Black  was  better  fitted  to  put  this  matter  before 
you,  as  he  is  in  closer  touch  with  the  national  field  and  is  ac- 

*Prinieri  Ink,  Jupe  24,  1915,  p.  26,. 


II 


198 


THE  DEPARTMENT  STORE 


quainted  with  what  a  gathering  of  this  kind  wants  and  what 
will  be  of  most  value  to  it.  On  the  other  hand,  it  was  argued 
that  the  man  you  really  want  to  hear  is  one  who  is  spending  his 
own  money  for  printers'  ink,  and  so  in  answer  to  the  persuasive 
call  of  the  almighty  dollar,  I  am  here  to  spend  twenty  minutes 
of  your  valuable  time. 

The  business  of  William  Filene's  Sons  Company  is,  in  the 
main,  to  sell  ready-made  apparel.  Since  moving  into  our  new 
store,  almost  three  years  ago,  we  have  extended  this  business 
until  it  includes  all  members  of  the  family. 

The  business  is  divided  into  four  co-ordinate  pyramids.  The 
head  of  each  pyramid  is  a  substantial  stockholder  in  our  com- 
pany; in  fact,  the  president,  general  manager,  and  these  four 
men  virtually  own  as  well  as  control  the  business.  Pyramids 
are  as  follows: 

Store  management,  having  charge  of  service  and  personnel — 
Presided  over  by  the  store  manager. 

Finance  and  accounts — Presided  over  by  the  comptroller. 

Merchandise — Presided  over  by  the  merchandise  manager. 

Publicity — Presided  over  by  the  publicity  manager. 

These  four  men  compose  a  board  of  managers,  which  con- 
trols all  the  details  of  the  business.  The  president,  general 
manager,  and  the  four  heads  of  pyramids  constitute  the  execu- 
tive committee  of  the  board  of  directors.  In  addition  to  the  six 
men  before  named,  the  board  of  directors,  eleven  in  number,  is 
composed  of  the  head  of  an  important  store  department  and 
four  representatives  nominated  by  our  employees'  organization 
known  as  the  Filene  Co-operative  Association.  I  shall  not  at- 
tempt to  divide  minutely  the  responsibilities  of  these  different 
bodies,  feeling  that  you  are  interested  in  the  matter  of  pub- 
licity primarily. 

First  of  all,  the  publicity  manager  of  the  Filene  store  manages 

the  publicity.     He  is  responsible  for  it  all,  from  the  chirp  of 

Publieiiy  canary  birds  in  the  restaurant  to  the  flaming  electric 

Manager  initial  on  the  roof.     Certain  laws  are  laid  down  for  his 

lias  the  guidance,  but  he  alone  is  responsible  for  the  right 
^b^^'  ^^^^^^^^^  ^^  those  laws.  As  somebody  put  it,  "  It*s 
'  ^  up  to  you  to  extend  the  glad  hand  through  the  spokeir 
word — ^to  be  the  chef  of  hot  stuff  in  cold  type." 

On  the  oflBcial  records  the  duties  and  responsibilites  of  the 
publicity  manager  are  set  forth  as  follows: 

"The  publicity  department  shall  direct  and  be  responsible  for 


THE  DEPARTMENT  STORE 


199 


i 


everything  printed  or  displayed,  in  or  out  of  the  store,  for  the 
purpose  of  attracting  public  attention  and  business. 

"Make  effective  the  publicity  policies  of  the  store  as  prescribed 
by  the  directorate  and  management. 

"Bring  into  the  store  at  all  times  an  adequate  nunaber  of 
possible  purchasers  by  arranging  for  and  administering  all 
printed  publicity  for  circulation  or  display  either  m  or  out  of  the 
store;  all  displays  of  merchandise,  either  in  or  out  of  the  store, 
designed  to  attract  public  notice;  and  every  special  publicity 
device,  entertainment,  or  occasion  designed  to  attract  pubhc  no- 

tice. 

"Be  responsible  for  establishing  through  publicity  media 
cordial  and  friendly  relations  between  the  store  and  the  public 
in  groups  or  as  a  whole,  but  not  individually."  i  ,•  ,    i 

Sales  volume  is  to  be  planned  on  the  basis  of  the  pubhc  s  buy- 
ing capacity  and  not  in  view  of  the  limitations,  real  or  imaginary, 
of  any  department  of  the  store  or  of  the  store  as  a  whole. 

This  means  that  planning  shall  always  be  ahead,  pulling  the 
store  up  to  maximum  efforts  and  results. 

My  organization  has  three  distinct  arms: 

1.  That  which  relates  to  advertising  copy; 

2.  Window  and  other  decorations  and  displays,  outdoors  or  m; 

3.  Entertainment. 

While  these  three  departments  report  to  me  directly,  theu- 
work  is  laid  out  in  conjunction  and  the  aim  is  to  have  it  in  abso- 
lute harmony.  Almost  invariably,  when  outsiders  visit  the  store 
and  learn  the  extent  of  our  advertising  organization,  sur- 
prise is  expressed  that  my  staff  is  so  large  and  evidently  so  costly. 
But  the  Filene  store  proceeds  upon  the  theory  that  nothing  is 
more  important  than  its  pubUcity. ,  We  have  learned  that  it  is 
not  what  we  think  of  ourselves  that  counts,  but  what  the  public 
thinks  of  us.  It  is  one  thing  to  offer  at  $15  each  a  thousand  suits 
that  actually  are  worth  $25.  It  is  quite  another  thing  to  make 
the  public  credit  our  statement  of  value.  It  is  one  thing  to  put 
back  of  our  merchandise  an  organization  that  reduces  to  the 
minimum  all  chance  of  misrepresentation  or  inadequacy.  It  is 
quite  another  thing  to  make  the  public  appreciate  that  organiza- 

This  all  takes  time.  The  hen  was  the  original  advertiser. 
Rushing  from  her  nest  when  the  first  egg  was  laid,  she  proclaimed 
that  egg  enthusiastically  and  sincerely.  The  chances  are  she 
was  not  believed.    But  as  time  and  cackles  rolled  around,  the 


\ 


m 


200 


THE  DEPARTMENT  STORE 


world  came  to  believe  the  hen.  The  egg  was  always  there. 
And  so  it  is  with  the  modern  store.  We  must  persist  until  the 
public  has  become  convinced  there  is  something  well  worth 
while  back  of  our  cackle. 

To  bring  this  about  we  have  stopped  at  no  trouble  or  legiti- 
mate expense.  And  we  have  proceeded  on  the  principle  that 
to  make  the  truth  carry  home  it  must  be  made  as  attractive  as 
possible.  We  aim  at  presenting  Filene  store  news  so  entertain- 
ingly that  the  public  will  look  for  it  in  the  newspapers. 

This  leads  up  to  one  of  the  most  important  fundamentals  of 
the  Filene  pubhcity  department.     It  is  a  law  of  the  house  that, 

Truth-     "^^  exaggeration,  no  misleading  statement,  and  no 

teUing     ^alf-truth  shall  be  made  under  any  circumstances  in 

connection  with  any  of  our  publicity."    Again.  "Any 

statement  the  truth  of  which  we  do  not  have  absolute  proof  at 

the  time  it  is  to  be  printed  will  be  excluded  from  our  publicity." 

As  an  aid  to  this  publicity,  we  maintain  a  competent  com- 
parison organization  working  equally  between  the  pubhcity  and 
merchandise  organizations  and  responsible  to  both,  the  duty  of 
which  is  to  see  that  no  exaggerated  statements  are  made  with 
respect  to  value,  style,  or  quality,  and  that  everything  is  sold  as 
low  as  or  lower  than  our  competitors  sell  it.  This  has  proved 
very  effective,  but  it  does  not  always  prevent  misstatements  or 
exaggerations  from  creeping  through.  Therefore,  to  make  as- 
surance doubly  sure,  we  offer  prizes  to  the  pubhc  and  to  our  em- 
ployees, and  regularly  advertise  the  fact  in  the  newspapers,  for 
the  detection  and  reporting  of  errors,  as  follows: 

1.  A  prize  of  five  dollars  shall  be  paid  any  woman,  girl,  or  man,  not  an  em- 
ployee, who  first  detects  an  error  in  our  failure  to  take  automatic  mark-downs 
in  the  automatic  bargain  basement  in  accordance  with  the  rule,  etc. 

2.  A  prize  of  five  dollars  shall  be  paid  any  woman,  girl,  or  man,  not  an  em- 
ployee, who  first  detects  any  misrepresentation  in  our  advertising,  awarded  by 
publicity  manager. 

3.  A  prize  of  five  dollars  shall  be  paid  any  woman,  girl,  or  man,  not  an  em- 
ployee, who  first  calls  our  attention  to  instances  in  which  we  are  undersold 
ofl  regular  merchandise  in  other  stores  in  Boston,  awarded  by  the  merchandise 
manager. 

4.  A  prize  of  50  cents  shall  be  paid  any  employee  for  discovering  errors  in 
any  department  in  the  store  (outside  of  his  own  department)  covering  errors 
in  mark-downs,  misstatements,  etc. 

The  law  that  we  shall  make  no  statement  in  our  advertising 
without  haying  absolute  proof  in  our  possession  means  just  that. 


THE  DEPARTMENT  STORE 


201 


For  example,  if  500  women's  coats  are  being  rushed  over  from 
New  York  for  disposal  on  a  certain  day,  we  will  not  print  a 
word  regarding  them  until  we  have  seen  the  coats— until  our 
comparison  department,  as  well  as  our  publicity  representetives, 
liave  approved  them.  The  advertisement  may  have  been 
written  in  advance  and  be  in  proof  form.  We  may  have  relied 
upon  buyer's  description  for  our  information.  But  the  adver- 
tisement will  not  be  released  for  newspaper  publication  until 
the  merchandise  has  been  shown  and  approved. 

The  Filene  store  differs  from  nearly  all  others  inasmuch  as  its 
publicity  department  is  placed  upon  the  same  plane  of  authority 
and  responsibility  as  other  departments.  This  is  in  accordance 
with  our  theory  that  it  is  bad  business  to  place  responsibility 
without  adequate  power.  In  the  Filene  store  the  merchandise 
department  has  no  authority  over  the  publicity  department- 
has  no  right  to  force  it  into  exploiting  any  merchandise  or  adopt- 
ing any  method  which  in  the  judgment  of  the  publicity  depart- 
ment is  not  in  accordance  with  Filene  store  principles.  In  most 
stores,  quite  the  contrary  is  the  case,  the  merchandise  depart- 
ment having  authority  to  force  the  publicity  man  into  ^vmg  it 
publicity  at  the  time  and  after  the  manner  decreed  by  the  mer- 
chandise organization.  i-  i   xu 

It  is  our  policy  to  devote  publicity  to  merchandise  which  the 
public  wants  rather  than  to  merchandise  which  the  store  wishes 
to  dispose  of.    This  means  that  the  making  of  mis- 
Pushing    takes  in  merchandising  is  not  rewarded  by  a  great 
p  ^^.      flourish  of  publicity  trumpets.    It  means  that  the 
XiC""   buyer  cannot  be  careless  and  indifferent  and  then  turn 
over  and  sleep  on  the  other  side,  secure  in  the  knowl- 
edge that  his  mistakes  will  be  forced  upon  the  public  through 
the  medium  of  printers'  ink.    On  the  other  hand,  our  publicity 
department  is  fully  empowered  to  plan  and  co-operate  with  the 
merchandise  department  toward  procuring  such  merchandise  as 
is  necessary  to  carry  out  our  policy  of  being  the  first  store  m 
Boston  to  show  the  season's  newest  styles. 

This  method  of  co-operation  results  in  safeguarding  our  pub- 
licity almost  automatically.  The  merchandise  department  in 
our  store  has  come  to  realize  that  the  merchandise  which  it  offers 
must  pass  the  careful  scrutiny  not  only  of  that  department,  but 
the  comparison  department  and  the  publicity  department  as  well 
or  no  publicity  wUl  be  given  to  it.  The  merchandise  department 
has  learned  that  this  careful  check  influences  its  buying  and  that 


II 


202 


THE  DEPARTMENT  STORE 


the  merchandise  which  it  offers,  bought  with  this  poHcy  in  mind, 
has  a  far  better  chance  of  selling  rapidly  and  thus  avoiding,  to  a 
very  great  extent,  the  dreaded  mark-downs.  The  merchandise 
department  having  learned  that  our  publicity  policy  is  of  tre- 
mendous advantage  to  it,  there  is  very  little  or  no  friction  and 
almost  perfect  co-operation  between  the  two  departments. 

All  of  this  understanding  and  method  is  made  the  more  possi- 
ble because  of  the  fact  that  the  major  part  of  our  advertising  is 
planned  in  conference  with  the  merchandise  department,  far  in 
advance  of  actual  selling,  so  that  there  is  ample  time  and  oppor- 
tunity for  co-operation  with  the  merchandise  and  other  depart- 
ments. 

To  carry  out  the  plan  of  showing  the  newest  goods,  the  pub- 
licity department  proceeds  upon  this  policy: 

(1)  That  we  shall  be  the  first  store  in  Boston  to  show  every  reasonable 
novelty  in  each  line. 

(2)  That  in  our  windows  and  in  our  departments  we  shall  constantly  present 
a  display  of  attractively  new  and  novel  styles. 

(3)  That  each  department  shall  be  required  to  bring  out  for  window  or 
newspaper,  or  both  if  advisable,  at  least  one  obvious  dramatic  novelty  each 
week  in  its  season,  or  as  often  as  is  possible. 

(4)  The  function  of  the  novelty  is  to  give  style  and  tone  to  the  department, 
help  the  sale  of  the  regular  lines,  draw  the  favorable  attention  of  the  public  to 
the  department  by  reason  of  the  fine  class  of  goods  shown  and  advertised, 
and  so  help  directly  as  well  as  indirectly  the  sale  of  merchandise  at  every  price. 

Another  rather  unusual  feature  of  the  Filene  store  is  the  fact 
that  we  draw  a  sharp  line  as  to  the  responsibility  of  the  advertis- 
Respomi'  ^S  department  at  the  point  where  that  department 
bilUy  of   has  brought  into  the  store  an  adequate  number  of 
Advertising  people.     In  other  words,  it  is  not  a  part  of  the  respon- 
Departmeni  ^^y^-^l^^y  and  duty  of  the  publicity  department  to  sell 
merchandise — simply  to  co-operate  in  seeing  that  the  right  mer- 
chandise is  shown  and  then  to  exploit  that  merchandise  in  such 
a  manner  that  sufficient  curiosity  shall  be  aroused  to  bring  an 
adequate  number  of  people  to  the  store. 

As  for  our  windows,  here  the  widest  latitude  is  permitted. 
We  are  showing  a  thousand  and  one  things  in  the  course  of  the 
year  that  we  do  not  sell — all  of  these  novelties  being  aimed  at 
public  interest  and  public  attention.  As  for  the  merchandise  in 
our  windows,  our  tendency  is  to  give  a  constant  exposition  of 
style  rather  than  mere  bargains.  In  other  words,  the  purpose 
is  to  make  the  windows  so  attractive  that  they  will  attract  the 


THE  DEPARTMENT  STORE 


203 


public  in  to  inspect  the  whole  store  instead  of  to  visit  one  or  two 

departments.  ,        ,  i     i    j 

On  five  of  our  selling  floors  we  have  mtenor  streets  overlooked 

by  display  windows.  ,  . 

Both  in  our  windows  and  newspaper  advertismg  we  are  work- 
ing away  from  the  old-fashioned  method  of  talking  bargains.  In 
our  basement  store  we  suddenly  discontinued  the  use  of  compara- 
tive prices  almost  two  years  ago,  without  even  explaining  that 
we  were  doing  so.  The  public  did  not  seem  to  notice  or  object 
to  the  change.  Our  basement  business  continued  to  increase. 
Four  months  ago  we  eUminated  comparative  prices  from  our 
main-store  publicity,  and,  as  matters  are  now  progressing,  it 
looks  as  though  we  would  permanently  continue  that  policy. 
If,  as  happens  occasionally  in  certain  seasons,  one  of  our  own 
prices  has  been  reduced,  we  are  privileged  to  say  so — either  in 
windows  or  newspapers.  But  we  are  careful  not  to  say  that  the 
old  price  is  the  present  value  of  the  merchandise. 

We  have  indulged  in  a  considerable  amount  of  semi-editorial 
publicity.  This  has  been  written  along  rather  chatty  lines  and 
its  aim  has  been  to  make  the  public  look  upon  the  Filene  store 
as  a  personal  acquaintance.  In  other  words,  we  have  injected 
as  much  of  the  human-mterest  element  into  our  pubUcity  as 
possible. 

In  the  old  days  of  the  Filene  store  every  month  was  a  bargam 
month,  every  week  a  bargain  week,  every  day  a  bargain  day, 
every  hour  a  bargain  hour.    Now  that  plan  of  doing 
Bargain   business  has  been  relegated  almost  entirely  to  our 
/^^ii    automatic  bargain  basement.     Upstairs  we  plan  to 
Curbed    limit  the  bargain  periods  to  four  months— two  in  the 
spring  and  two  in  the  autumn — ^falling  between  the 
regular  seasons.     Which  means  that  during  eight  months  of  the 
twelve  we  are  offermg  a  good  portion  of  Filene  merchandise  at 
fair,  low  prices  and  at  regular  profits.     Of  course,  we  are  still  on 
the  outlook  for  special  purchases.    But  the  latter  correspond  to 
the  midnight  fire  or  murder  which  upsets  the  plans  of  a  morning 
newspaper's  first  page,  but  which  helps  that  first  page  by  up- 
setting it  occasionally.     Here  we  aim  at  making  the  unexpected 
— the  quick  purchase — the  exception  rather  than  the  rule.     We 
hold  that  a  store  which  does  not  have  to  depend  upon  the  acci- 
dental is  the  store  which  does  not  trace  its  success  to  accident. 

We  believe  that  the  importance  and  power  given  to  our  pub- 
licity department  and  its  policies  are  justified  by  the  progress 


1  I 

h 


■ 


204 


THE  DEPARTMENT  STORE 


made,  and  we  commend  it  to  the  careful  consideration  of  our 
colleagiies  who  are  devoting  large  sums  of  money  to  the  exploit- 
mg  of  their  business,  feeling  sure  that  if  the  experiment  be  given 
a  fan-  trial  it  will  prove  of  great  benefit  to  the  merchant  and  to 
the  public  as  well  And  the  public,  as  you  know,  will  in  the  final 
analysis  decide  whether  any  institution  catering  to  it  shall  fail 
or  succeed. 

(2)    METHODS   FOR   SOLVING   THE   DEPARTMENT-STORE    PROBLEM 

The  ideal  condition  from  the  national  advertiser's  standpoint 
IS  that  in  which  the  department  store  adopts  the  policy  of  ex- 
ploiting the  fact  that  it  handles  nationally  advertised  goods. 
During  the  past  year  or  so  a  number  of  department  stores  have 
adopted  the  plan  of  having  what  were  called  "expositions  of 
nationally  advertised  goods/*  For  a  given  period  of  time  the 
store  makes  a  specialty  of  putting  into  its  window  displays  and 
mto  Its  newspaper  copy  well-known  national  trademarks,  and 
other  advertising  matter  concerning  the  goods  produced  by 
national  advertisers.  The  methods  employed  in  this  sort  o> 
an  exposition  by  a  department  store  in  Detroit,  Mich.,  are  as 
follows : 

hpW^JT^'\'''°r  «^  "^^^^'la^  advertised  goods  has  just  been 
ni?.i^?^  Tr  u  t1  ^"^«^"  Company,  a  department  store  in 
lietro  t,  Mich  It  was  energetically  promoted  by  the  store 
"owLt'^  *"  the  result  that  there  was  a  marked  increase  in 
charge  accounts  and  that  sales  for  July-an  ^off"  month- 
were  higher  than  July  of  1913. 

Both  the  fact  of  the  experiment  and  the  success  attending  it 
are  of  real  significance.  If  the  J.  L.  Hudson  Company  is  tyjfcal 
fu^l  P^^^^««»ve  element  among  department  stores,  manufac- 
turers may  find  easier  going  m  the  future  in  their  endeavors  to 
secure  the  much-coveted  department-store  co-operation  The 
story  is  an  important  one  and  here  it  is- 

foA''^"  W^  %^A  ^  ^^*^^'  ^^^^  ^'^^  Advertising  Manager 
for  the  J.  L   Hudson  Company,  the  store  was  not  wholly  in 
sympathy  with  the  common  idea  held  by  a  good  many  merchants 
*Pnnteri  Ink,  September  3,  1914,  p.  24. 


ill 


THE  DEP.\RTMENT  STORE 


205 


that  success  in  retail  advertising  hinges  entirely  on  the  price 
argument.  A  year  before  the  management  had  seen  great 
crowds  throng  Detroit*s  leading  stores  to  look  at  "Made  in 
Detroit*'  merchandise,  during  the  "Made  in  Detroit  Week/' 
held  under  the  auspices  of  the  Detroit  Chamber  of  Commerce. 
**  If  the  people  will  turn  out  in  reponse  to  such  advertising  dur- 
ing the  warm  weather,  they  will  turn  out  just  the  same  if  we 
hold  a  similar  exposition  of  nationally  advertised  products  and 
promote  it  with  the  right  kind  of  publicity,"  the  store  argued. 
And  so  it  began  to  lay  the  foundation  of  a  great  nationally 
advertised  merchandise  exposition  to  be  held  during  the  dullest 
of  the  dull  season — the  first  two  weeks  in  July. 

The  plans  for  this  exposition  called  for  enlisting  the  co-opera- 
tion of  the  manufacturers  whose  lines  the  store  carried,  but  no 
advertising  allowance  was  asked.  The  Hudson  Company  be- 
lieved it  was  up  to  it  to  shoulder  the  whole  cost  of  the  advertis- 
ing, inasmuch  as  it  would  derive  the  big  profit  from  the  "sale," 
and  esj>ecially  the  profit  on  the  new  accounts  the  store  hoped 
to  secure.  As  the  letter  to  the  manufacturers  stated:  "We 
want  your  assistance.  No  money  for  ads.  Just  hearty  co-oper- 
ation with  displays,  demonstrators,  or  other  features  suitable  to 
your  particular  line  which  we  carry  in  stock." 

And  the  company  got  the  co-operation  it  sought.  Ninety-five 
per  cent,  of  the  manufacturers  approached  agreed  to  help. 
Colgate  toilet  preparations,  Bissell  carpet-sweepers,  Scot  paper 
towels.  Eureka  vacuum  cleaners.  Koh-i-noor  fasteners.  Hud- 
nut  perfumes,  Indestructo  luggage,  Fownes  gloves,  Krementz 
buttons,  Victor  talking  machines,  Chickering  pianos.  Buster 
Brown  hosiery,  McKay  table  pads,  American  Lady  corsets, 
Kleinert  dress  shields,  Martha  Washington  comfort  shoes, 
Ingersoll  watches.  Skinner  satins,  Butterick  patterns,  Gillette 
safety  razors,  Hotpoint  electrics,  Stafford  inks.  Waterman 
fountain  j)ens,  Dennison  crepe  papers,  Eagle  pencils,  Taylor 
pottery,  and  other  well-known  articles  were  exploited  by  some 
special  attraction — a  demonstrator,  educational  exhibit,  sam- 
pling or  souvenirs — and  were  used  as  "headliners'*  in  the  ad- 
vertising. 

The  publicity  campaign,  which  was  planned  and  executed  by 
the  store's  own  advertising  department,  sought  to  draw  the 
crowds  by  an  appeal  to  curiosity.  "Come  and  see  the  inter- 
esting exhibits,  demonstrations,  and  show  features,"  urged  the 
street-car  cards.  "  Thousands  of  well-known  brands  of  goods  in  a 


|i 


206 


THE  DEPARTMENT  STORE 


new  way — ^with  working  demonstrations,  set  displays,  attrac- 
tively arranged  tableau  effects,  gorgeous  color  schemes,  living 
models,  etc.,  etc.,**  cried  the  big  double-spread  newspaper  ads. 
"Meet  me  at  Hudson's.  Come  and  enjoy  the  exhibition  of 
nationally  advertised  goods,"  exhorted  the  thousands  of  post- 
cards mailed  by  the  store's  army  of  salespeople  to  their  friends 
and  customers.  "Be  sure  you  bring  along  an  extra  large  hand- 
bag to  carry  home  the  booklets,  cards,  catalogues,  samples,  and 
souvenirs  of  the  occasion,"  suggested  the  great  four-page,  three- 
color  circulars  mailed  to  the  25,000  Hudson  out-of-town  cus- 
tomers. But  nothing  was  said  about  bargains;  nor  were  any  prices 
cut.  The  few  products  that  were  listed  with  prices  were  shown 
more  as  a  suggestion  than  an  appeal  to  the  bargain  instinct. 

The  same  was  true  with  the  window  displays.  Instead  of  a 
lot  of  the  customary  price-cards,  suggesting  great  bargains 
within,  show-cards  were  prepared  appealing  to  the  universal 
desire  for  reliable  merchandise.  Thus  it  was  hoped  to  connect 
the  store  permanently  in  the  public  mind  as  the  home  of  ad- 
vertised products  of  unquestioned  merit.  The  ten  window  dis- 
plays featuring  Eaton,  Crane  &  Pike  writing  papers,  Bien- 
Johe  corsets,  Melba  toilet  preparations,  Wilcox  &  White's 
Angelus  player  pianos,  Butterick  patterns.  Bear  brand  hosiery, 
Kayser's  gloves,  President  suspenders.  Arrow  shirts  and  collars, 
and  Vassar  and  Rocking  Chair  underwear,  respectively,  were 
planned  so  that  any  one  seeing  the  advertising  of  these  products 
would  unconsciously  think  of  the  Hudson  store  as  being  the 
Detroit  headquarters  for  them. 

But  one  of  the  shrewdest  strokes  of  all  was  the  way  the  man- 
agement tied  up  the  store  with  the  good  will  which  goes  with 
Tying  the  ^^^    advertised    trademarks.      Great    window    cards 

Store  to    were  prepared  in  red,  white,  and  blue,  the  national 
^  ^'■P^-  colors,  and  upon  them  were  pasted  the  familiar  ads 

'^''*^*  of  products  being  shown  within  the  store.  These 
ads  were  clipped  from  the  magazines,  and  the  wording  in  great 
red  letters  announced  that  the  product  was:  "Nationally  ad- 
vertised and  sold  at  Hudson's."  Naturally  after  a  passerby 
had  looked  at  these  cards,  which  were  displayed  prominently 
in  the  ten  windows,  he  had  a  high  regard  for  the  kind  of  mer- 
chandise the  Hudson  Company  carried,  for  the  reputation  of 
these  products  was  familiar  to  her  because  of  her  reading  maga- 
zines carrying  that  advertising.  At  the  same  time,  whenever 
the  passerby  reads  the  advertising  of  those  products  in  the  fu- 


THE  DEPARTMENT  STORE 


207 


ture,  she  can't  help  but  think  of  "Hudson's,"  just  as  arrows  re- 
mind us  of  Coca-Cola. 

But,  setting  aside  any  future  advantage  which  the  store  will 
gain  through  thus  establishing  itself  as  the  Detroit  home  of 
nationally  advertised  merchandise,  the  exposition  had  a  decided 
effect  on  inmaediate  business.  After  saying  that  the  officers  and 
board  of  directors  regarded  it  as  successful  (spelling  the  word 
out),  Mr.  Leonard  concluded:  "The  show  gave  us  a  decided 
strategical  advantage  in  that  it  enabled  us  to  attract  the  atten- 
tion of  Detroit  shoppers  to  our  new  buildings  and  evident  pro- 
gressiveness.  The  attendance  was  wonderful,  and  the  finan- 
cial returns  were  decidedly  satisfactory.  We  enjoyed  a  30 
per  cent,  increase  in  charge-account  patronage  during  July,  and 
sales  for  the  month  were  considerably  higher  than  they  were  a  year 
ago.  But  what  we  regard  as  especially  gratifying  is  that  our 
trade  in  the  well-known  brands  of  merchandise  has  increased 
materially  since  the  exposition,  and  we  feel  that  the  affair  has 
been  a  wonderful  help  to  us  in  maintaining  the  popularity  of 
the  goods  in  question." 

But  from  the  advertisers'  point  of  view  this  exhibition,  to 
whose  success  they  contributed,  the  big  gain  was  the  effect  on 
the  salespeople.  It  goes  without  saying  that  an 
Selling  the  employee  in  walking  around  the  store  and  observing 
Employees  ^^^  various  demonstrations  and  exliibits  acquires  a 
deep  regard  for  such  products,  and  will  naturally  ex- 
ercise that  regard  in  her  sales  work  whenever  possible.  Then, 
too,  the  educational  bulletins  issued  by  the  advertising  depart- 
ment during  the  exhibition  and  immediately  preceding  it  helped 
to  shape  an  employee's  attitude  toward  meritorious  advertised 
articles. 

This  bulletin  service  was  very  comprehensive  and  reached 
even  the  elevator  boys.  Altogether  some  twelve  bulletins  were 
issued.  Some  idea  of  the  effect  of  these  bulletins  can  be  ob- 
tained by  this  paragraph  from  Bulletin  No.  1:  "This  mammoth 
*  show '  will  serve  a  laudable  purpose — that  of  connecting  Hud- 
son's with  merchandise  of  national  fame  and  worth.  It  will 
bring  to  mind  in  Detroit  that  certain  nationally  advertised 
goods  which  pass  the  censorship  of  high-class  magazines  may 
be  secured  at  the  J.  L.  Hudson  stores."  Here  we  see  revealed 
the  attitude  of  the  store  toward  advertised  products  and  the 
way  it  is  educating  its  salespeople  to  push  them  because  of  their 
prestige-giving  value. 


I 


208 


I 


■'i  I' 


1 . 


I 


. 


THE  DEPARTMENT  STORE 


The  story  of  this  experiment  will  not  be  lost  upon  manufac^ 
turers  who  are  constantly  striving  for  department-store  co- 
operation. Here  is  a  compelling  concrete  example  to  cite  to 
lukewarm  retailers.  And  certainly  the  moral  of  the  exposition 
will  not  escape  the  notice  of  those  who  are  connected  with  the 
management  of  progressive  department  stores. 

Demonstrations  conducted  in  department  stores  either  wholly 
or  partly  at  the  expense  of  the  national  advertisers  have  been 
among  the  most  common  methods  of  co-operation  between  na- 
tional advertisers  and  stores  of  this  type.  M.  Zimmerman  of 
the  PriJiters*  Ink  staff  describes  in  the  following  terms  the  dem- 
onstration methods  employed  by  a  number  of  national  adver- 
tisers: 

*When  is  it  advisable  for  a  manufacturer  to  place  his  own 
demonstrators  m  retail  stores,  and  when  do  such  demonstrators 
cease  to  be  of  value  to  him  ?  Those  questions  are  not  the  easiest 
m  the  world  to  answer,  but  they  are  occupying  a  constantly  in, 
creasing  share  of  attention  as  the  use  of  demonstrators  spreads. 
In  some  departments  of  big  stores,  nearly  every  girl  behind 
the  counter  is  a  demonstrator,  paid  by  the  manufacturer.  In 
toilet  goods  departments  it  is  frequently  the  case  that  the  only 
clerk  on  the  store's  payroll  is  the  stock  girl.  That  shows  how 
the  demonstration  system  has  grown.  Many  manufacturers 
are  investing  a  great  deal  of  money  in  this  form  of  publicity, 
and  It  IS  of  great  importance  to  find  out  when  it  ceased  to  pav  a 
profit. 

Right  at  the  start  it  is  necessary  to  distinguish  between  the 
two  classes  of  demonstrators:  those  who  are  employed  to  help 
the  distribution  and  to  win  friends  for  a  new  article,  and  those 
who  are  maintained  to  protect  an  established  line.  Colgate  & 
Company  employ  a  great  many  girls  for  the  latter  purpose,  not 
so  much  to  win  new  users  for  the  company's  products  as  to  keep 
old  friends  from  being  "switched,"  and  to  maintain  the  com- 
pany s  standing  against  competition  which  may  vigorously 
develop  from  time  to  time.  Demonstrators  of  this  kind  may 
be  regarded  as  a  permanent  feature  of  the  company's  sales 

^Printers"  Jtik,  March  19,  1914,  p.  94. 


THE  DEPARTMENT  STORE 


200 


policy,  and  are  not  subject  to  the  conditions  which  govern  the 
use  of  demonstrators  whose  immediate  duty  is  to  influence  new 
customers. 

When  a  demonstrator  enters  a  department  store,  she  becomes 

a   regular  employee  of  her  department,  and  must  obey  the 

ffow  Dem-  ^ules  and  regulations  in  the  same  manner  as  any 

omtrators  other  employee  of  that  store.     Her  salary  is   sent 

Are  ^  to  her  from  the  concern  which  she  represents.     Other- 

*  Placed     ^jgg  gj^g  jg  g^j^  employee  of  the  store  and  is  known 

as  a  demonstrator  only  to  the  employees  of  her  department- 
She  must  report  every  morning  at  the  same  time  the  girls 
do  and  must  leave  with  the  other  girls.  She  waits  on  all 
the  trade  in  the  regular  manner,  so  that  a  customer  whom  she 
waits  on  does  not  know  that  she  is  a  demonstrator  representing 
a  special  article.  During  sales,  if  the  girls  have  to  remain  over 
their  regular  hours  either  to  arrange  the  stock  or  take  inventory, 
she  must  remain  with  them  and  do  an  amount  of  work  equal  to 
the  other  girls. 

As  a  general  rule,  the  demonstrator  has  a  little  display  of  her 
goods  on  the  showcase  which  covers  about  one  or  two  feet  of 
space,  all  dej>ending  on  how  large  her  line  is.  She  is  always  be- 
hind her  display,  and  it  is  in  this  way,  when  waiting  on  a  cus- 
tomer, that  she  tries  to  persuade  the  customer  to  buy  her 
particular  brand.  Wherever  you  notice  in  a  department  store  a 
conspicuous  display  of  certain  goods  on  the  showcase  you  can  al- 
ways feel  sure  that  there  is  a  girl  there  demonstrating  that  line. 

When  a  demonstrator  is  first  placed  in  a  department,  no  terms 
or  contracts  are  made  as  to  the  length  of  time  that  demonstra- 
tion will  remain  in  the  store.  It  generally  remains  during  the 
pleasure  of  both  parties  and  is  subject  to  withdrawal  at  any 
time  the  manufacturer  or  the  store  sees  fit.  When  the  buyer  of 
a  department  obtains  a  good  girl,  he  tries  to  keep  her  as  long 
as  possible,  because,  after  a  while,  if  the  girl  shows  that  she  is  a 
clever  saleswoman,  she  becomes  very  valuable  to  the  store. 
Sometimes  when  the  manufacturer  seeks  to  open  a  demonstra- 
tion in  a  certain  store  the  buyer  will  suggest  one  of  his  own  girls, 
claiming  that  she  knows  the  stock  in  that  department  and  with 
a  little  coaching  will  become  a  good  demonstrator.  In  a  great 
many  cases  unless  the  manufacturer  agrees  to  the  buyer's 
wishes  he  wdll  not  be  able  to  place  a  demonstration,  but  it  is  a 
bad  policy  to  hire  a  girl  from  the  store.  I  know  of  several  cases 
where  it  has  been  done  and  the  right  girls  were  not  obtained. 


, 


II 


; 


1 


£10 


THE  DEPARTMENT  STORE 


because  the  buyer  in  each  case  favored  a  particular  girl,  who 
did  not  prove  up  to  the  standard  desired.  It  is  always  best 
when  placing  a  demonstrator  to  select  a  girl  who  has  not  in  any 
way  been  connected  with  the  store. 

The  salaries  of  demonstrators  range  from  $12  to  $20  a  week 
and  in  some  cases  higher.  In  some  lines  a  girl  receives  a  5  per 
cent,  commission  besides  her  salary.  In  these  cases  it  is  mostly 
where  the  line  consists  of  perfume,  sachet,  face  powders,  and  other 
articles  of  that  nature,  so  that  girls  representing  these  lines 
average  from  $15  to  $20  a  week,  the  commissions  generally 
amounting  to  from  $3  to  $5  a  week,  depending  on  the  location 
of  the  store.  Some  firms  start  their  girls  with  a  fixed  salary 
and  it  is  increased  according  as  their  sales  increase,  so  that  if 
a  girl  starts  with  $12  a  week  and  her  sales  increase  steadily  for 
four  weeks  over  a  certain  amount,  then  she  will  receive  an  in- 
crease of  several  dollars  a  week,  so  that  in  some  cases  where  a  girl 
started  with  $12  a  week  she  is  earning  as  high  as  $20  inside  of  a 
year.     .     .     . 

Take  a  demonstrator  whose  minimum  salary  is  $12  per  week 
and  whose  maximum  salary  reaches  as  high  as  $20.  If  she  is 
selling  an  article  which  is  supposed  to  retail  for  25  cents,  in 
order  to  make  that  demonstration  pay  she  must  sell  at  least 
150  jars  a  week.  Of  course,  when  she  first  opens  the  demon- 
stration it  will  be  hard  to  reach  that  quantity,  but  after  being 
in  the  place  several  months  this  is  supposed  to  be  her  minimum; 
she  is  supposed  to  increase  her  sales  weekly. 

I  have  been  able  to  obtain  the  report  of  a  demonstrator  who 
was  demonstrating  a  cream  which  was  sold  at  a  cut  price,  the 
original  selling  price  being  25  cents.  It  was  sometimes  sold  as 
low  as  15  cents,  varying  from  15  cents  to  19  cents.  This  demon- 
strator I  consider  one  of  the  best  I  have  ever  met.  She  was  the 
first  girl  to  open  up  a  demonstration  for  a  certain  product  in  one 
of  the  large  department  stores  in  New  York  City.  Starting  No- 
vember 9th  and  ending  April  5th,  she  sold  1,931  jars  of  face  cream. 
Over  the  period  of  21  weeks  she  averaged  92  jars  a  week.  In  the 
month  of  November  there  was  a  sale,  the  price  being  greatly 
reduced,  and  she  sold  151  jars.  During  the  month  of  January 
another  sale  was  held  and  she  sold  222  jars,  and  in  February  392. 
Now,  if  you  take  out  the  number  of  jars  sold  on  these  three  sale 
days,  which  total  765,  you  will  note  that  her  actual  average  for 
each  week  was  only  64.  AMien  she  started,  the  sale  for  her  first 
week  was  58,  second  week,  76,  and  third  week,  90.  These  figures 
show  that  she  had  good  increases  every  week.    The  next  week 


THE  DEPARTMENT  STORE 


211 


was  the  sale  and  151  jars  were  sold.  The  following  week  after 
the  sale  there  was  a  decided  drop  to  61,  followed  by  67,  by  49, 
and  by  48.  The  demonstrator  explained  to  me  that  the  reason 
her  sales  were  small  was  that  a  customer  would  ask  the  price  of 
her  cream,  and  upon  being  told  would  say  that  she  could  get  it 
cheaper  and  would  inquire  the  date  of  the  next  sale.  The  two 
succeeding  sales  proved  without  a  doubt  that  her  statement  was 
correct.  Although  her  weekly  sales  did  drop  off,  they  increased 
greatly  when  the  store  had  a  sale,  showing  that  the  customers 
would  wait  until  a  sale  arrived  and  then  would  buy  several  jars 
at  a  time  and  stock  up  until  the  next  sale. 

This  has  been  the  prevailing  condition  with  this  article  for  the 
past  year.  While  the  reports  of  the  demonstrators  would  be 
very  high  at  the  end  of  the  month,  still  the  results  were  not  caused 
by  their  efforts.  Three  weeks  out  of  the  month  their  reports 
would  be  very  small,  numbering  from  40  to  60  jars  a  week,  and 
then  the  week  of  the  sale  it  would  jump  from  250  to  1,000  jars. 
Customers  would  not  be  willing  to  pay  the  standard  price,  but 
would  wait  for  sale  days.  Some  customers  would  leave  an  order 
that  as  soon  as  a  sale  took  place  to  send  them  a  certain  quantity. 

These  observations  proved  conclusively  that  when  a  demon- 
strator reaches  this  stage,  and  only  sells  a  large  quantity  on  sale 
days  and  practically  nothing  is  sold  through  demonstrating,  her 
usefulness  to  the  manufacturer  has  ceased.     ... 

A  good  many  manufacturers  do  not  pay  as  much  attention  as 

they  should  to  securing  the  right  type  of  girls  for  particular 

stores.     Place  a  demonstrator  in  one  store  and  she 

PicHng    will  be  a  failure.     Put  that  same  girl  in  another  store 

the  Rigid  ^^ j  gjj^  ^ju  perhaps  be  a  decided  success. 

Demon-  One  girl  I  know  had  been  placed  in  one  of  the  down- 
strator  town  New  York  department  stores  which  caters  to  a 
cheap  class  of  trade.  She  was  demonstrating  perfumes 
and  face  powders.  The  general  method  in  that  store  is  to  hail  a 
customer  as  she  is  passing  by  and  demonstrate  to  her  the  value  of 
the  preparation  by  applying  it  to  her  face.  This  particular  girl 
was  of  a  refined  nature  and  could  not  bring  herself  to  employ 
these  "  puUer-in  "  tactics.  As  a  result,  she  made  a  poor  showing. 
The  manager,  however,  knowing  that  this  girl  had  ability,  placed 
her  in  one  of  the  better  uptown  stores.  In  this  place  the  girl 
was  a  success  and  soon  became  the  best  demonstrator  for  the 
store. 

On  a  trip  downtown  to  one  of  the  drug  stores  which  had  been 


11 


I 


I 


li 


m 


THE  DEPARTMENT  STORE 


in  the  habit  of  accepting  demonstrators  from  time  to  time,  I  was 
particularly  struck  by  the  absence  of  demonstrators  of  any  kind. 
I  asked  the  manager  about  it.  "I  absolutely  refuse  to  have  any 
more  demonstrators,"  he  said.  Upon  being  asked  why,  he  re- 
plied :  **  There  is  this  to  say  about  the  demonstrator.  Some  mer- 
chants claini  that  a  demonstrator  is  of  value  to  you  in  that  you 
save  clerk  hire,  and  at  the  same  time  you  get  a  girl  who  is  intel- 
ligent, knows  the  line  well,  and  will  be  of  valuable  assistance  to 
you.  Lately  I  have  found  the  demonstrator  to  be  a  detriment 
to  me,  because  the  type  of  girl  whom  a  manufacturer  generally 
selects  is  one  of  these  tall  blondes  who  is  adorned  in  the  latest 
and  most  extreme  fashion,  and  instead  of  attracting  customers 
usually  detracts.  I  cannot  afford  to  have  one  of  those  around 
my  place."     .     .     . 

I  have  one  concern  in  mind  which  up  to  the  present  time  has 

employed  over  fifty  demonstrators  who  were  distributed  all  over 

the  country.     Before  a  demonstrator  was  allowed  to 

S/'om'-  ^^  ^^^^  ^^^  ®*^^^  ^^^  ^^^  ^^^*  Siven  certain  literature 

omtratm  ^^^ut  the  product.  This  literature  contained  all  the 
in  Advance  facts  about  the  preparation  of  that  product  as  well  as 
all  the  selling  points  about  it.  She  had  to  become 
thoroughly  familiar  with  all  this  so  that  she  could  talk  intelli- 
gently and  fluently.  Every  week  certain  new  selling  points 
were  sent  to  her  from  the  main  oflSce.  These  girls  were  very 
much  interested  in  this  method,  and  soon  they  were  recognized 
by  the  buyers  of  the  department  stores  where  they  were  em- 
ployed as  being  the  best  demonstrators  in  the  store.  Not  only 
did  they  show  an  interest  in  the  article  which  they  represented, 
but  also  showed  an  interest  in  the  store  as  well,  and  whenever  a 
girl  left  that  store  not  only  did  the  other  girls  behind  the  counter 
express  regret  at  her  leaving  but  the  buyer  would  ask  the  manu- 
facturer to  try  to  send  another  as  good. 

In  one  particular  case  the  demonstrator  became  so  valuable 
to  the  buyer  that  he  placed  her  in  charge  of  the  entire  drug  and 
chemical  counter.  She  had  so  much  to  do  that  it  really  inter- 
fered with  her  demonstration,  and  I  remember  when  the  assistant 
buyer  of  that  department  left  that  store  to  become  buyer  in 
another  store  he  tried  to  induce  the  girl  to  go  with  him  to  the 
other  store  and  conduct  a  demonstration  for  him  there.     .     .     . 

Much  of  the  demonstrator's  eflSciency  depends  upon  the  han- 
dling she  receives  from  the  factory  while  she  is  in  the  field.  After 
the  manufacturer  has  carefully  picked  out  the  right  girl  for  the 


THE  DEPARTMENT  STORE 


213 


i 


place  and  has  trained  her,  he  must  not  only  keep  track  of  what 
she  accomplishes,  but  he  must  let  her  know  that  he  knows. 

Personal  touch  with  the  demonstrator  is  important;  a  repre- 
sentative should  visit  her  now  and  then  and  explain  new  selling 
points.  If  a  demonstrator  has  made  a  good  showing,  it  is  ad- 
visable to  send  her  a  letter  congratulating  her  upon  that  week's 
work.  If  she  has  had  a  particularly  bad  week,  it  is  wise  to  write 
her  a  letter  of  encouragement.  One  girl  recently  complained 
to  me  that  her  firm  takes  less  personal  interest  in  her  work  now 
than  four  years  ago.  She  does  not  receive  the  same  friendly  and 
personal  letters  that  she  had  been  in  the  habit  of  receiving.  For 
instance,  instead  of  being  addressed  as  "Dear  Miss  Smith,"  it  is 
now  "Dear  Madam."  This  may  be  only  a  small  matter,  but  it 
serves  to  show  the  attitude  of  mind  of  this  class  of  workers. 

These  girls  very  often  complain  that  their  jobs  give  them  con- 
stant worry.  If  they  are  on  a  salary,  they  like  to  keep  up  to  the 
standard  required  of  them.  Sometimes  it  is  impossible,  and 
they  do  not  know  how  the  management  feels  toward  them  when 
the  reports  do  not  show  the  expected  sales.  It  is  in  these  cases 
that  encouraging  letters  are  of  greatest  value,  as  they  relieve  the 
tension  demonstrators  are  always  under,  because  they  feel  that 
their  positions  depend  upon  the  manufactui-er's  satisfaction  with 
the  results. 

In  concluding,  I  want  to  say  that  the  value  of  a  demonstrator 
to  the  manufacturer  lies  mostly  in  the  manner  in  which  he  gets 
his  distribution.  If  he  is  doing  national  advertising  then  a 
demonstrator  is  not  so  valuable,  but  where  he  has  not  the  money 
to  spend  in  national  advertising  and  wants  to  get  distribution, 
the  demonstrator  is  one  of  the  best  methods  possible,  especially 
if  the  manufacturer  is  looking  for  local  distribution.  A  demon- 
strator is  very  valuable  where  the  manufacturer  does  a  great  deal 
of  sampling,  for  a  sample  given  out  by  a  demonstrator  with  a 
little  personal  talk  to  the  customer  leaves  a  lasting  impression, 
and  in  nearly  every  case  the  sample  will  be  used.  A  demon- 
strator generally  hands  out  between  300  and  500  samples  a  week 
so  that  with  several  demonstrators  working  along  those  lines 
there  is  an  immense  influence  at  work  which  does  not  imme- 
diately appear  in  the  sales  reports. 

J.  F.  Beale,  Jr.,  who  has  already  been  quoted  in  this  chapter 
in  connection  with  the  statement  of  the  department-store  prob- 
lem, is  of  the  opinion  that  the  strategic  position  in  the  struggle 


« 


w 


« 


I 


214 


THE  DEPARTMENT  STORE 


between  the  national  advertiser  and  the  department  store  is  the 
department  store's  clerk.  In  two  recent  articles  he  gives  his 
ideas  about  the  best  methods  to  be  employed  by  the  national 
advertiser  in  securing  the  enthusiastic  support  for  his  product 
of  the  department-store  clerk.  The  following  is  quoted  from  the 
second  of  these: 

*A  few  days  after  the  publication  in  the  July  22d  issue  of 
Printers  Ink  of  my  article  addressed  to  the  manufacturer 
seeking  the  co-operation  of  the  department  store,  I  received 
a  letter  from  a  prominent  manufacturer  asking  a  [pertinent 
question. 

The  reply  may  properly,  I  think,  be  through  the  same  medium 
that  was  the  means  of  inspiring  the  inquirj^  It  may  be  of  some 
help  to  others  besides  the  one  who  wrote  the  letter.  Here  is  the 
letter: 

"I  have  read  with  great  interest  your  article  in  Printers'  Ink 
entitled  *What  I  Would  Do  as  a  Manufacturer  If  I  Were  Seek- 
ing Department-store  Co-operation.'  I  was  particularly  struck 
with  one  of  your  statements  which  read  substantially  as  follows : 
'And  do  not  forget  that  the  salesperson  is  the  connecting  link 
between  the  manufacturer  and  storekeeper  on  the  one  side,  and 
the  consumer  on  the  other.  No  chain  is  stronger  than  its 
weakest  link.  See  to  it  that  the  salespeople  are  thoroughly 
trained  in  the  merits  of  your  product.  A  diplomatic  mamifac- 
turer  or  his  representative  can  effect  this  readily.  One  of  the 
most  successful  manufacturers  of  "branded"  underwear  for 
men  gives,  with  the  consent  of  the  merchants,  five  cents  on 
every  garment  of  his  make  to  the  salesperson  who  sells  it.' 

"Would  I  be  trespassing  too  heavily  upon  your  time  to  ask 
your  suggestions  as  to  how  the  training  of  employees  to  greatest 
eflSciency  in  salesmanship  of  a  given  line  may  be  accomplished.'*" 

To  answer  this  question  comprehensively  would  require  more 
space  than  was  given  to  the  original  article  from  which  it  is 
quoted. 

First  of  all  there  must  be  organization  for  such  work.  It 
cannot  be  successfullv  done  in  a  haphazard  manner. 

Given  the  sales  clerk  of  only  average  inteUigence  and  he  or  she 
can  be  trained  to  high  efficiency  by  the  right  methods. 

*Pnnlers  Ink,  July  29.  1915.  p.  «6. 


THE  DEPARTMENT  STORE 


%\5 


It  is  first  of  all  quite  as  essential  to  give  the  sales  clerk 
selling  points  and  facts  about  the  merchandise  as  to  provide 
that  clerk  with  the  merchandise  itself  and  with  prospective 
customers. 

Let  us  take  as  an  example  Olus  underwear  for  men,  now  making 
such  a  strong  publicity  campaign  in  New  York  City. 

We  will  suppjose  the  following  case  as  an  illustra- 
"O/m*"  as  |.Jqjj  q£  |.|jg  possibilities  of  training  a  clerk  to  sell  a 
^^tration     specified  brand.     It  is  taken  for  granted  that  the 
clerk  has  already  learned  the  rudiments  of  selling. 

A  customer  comes  into  the  men's  furnishings  section  of  a  de- 
partment store  and  says  to  the  clerk,  "Let  me  see  some  medium- 
priced  lightweight  underwear,  please." 

The  clerk  who  is  mechanical  will  probably  say,  "Yes,  sir, 
what  size?  Athletic  or  with  sleeve?  Short  or  long  drawers?" 
and  proceed  to  show  two  or  three  lines  of  garments. 

The  clerk  who  has  been  specifically  trained  will  say  "Yes,  sir. 
Your  size,  please?"  Or  he  will  measure  the  prospective  cus- 
tomer's waist  and  chest.  He  will  then  take  from  the  shelves 
ready  to  show  two  grades  of  separate  garments  at  say  one  dollar 
a  garment,  but  he  will  open  a  box  of  "Olus"  coat-cut  union  suits 
of  the  correct  size  priced  at  two  dollars. 

The  customer  has  not  asked  for  union  suits  and  may  say,  "I 
prefer  the  separate  garments."  Not  to  antagonize  the  cus- 
tomer the  clerk  states  the  price,  but  deftly  returns  to  the  "Olus" 
union  suit  and  says,  "Have  you  ever  worn  union  suits?"  or 
something  to  that  effect.  "I  would  like  to  suggest  that  if  you 
try  these,  the  famous  *01us'  brand  which  you  have  no  doubt 
seen  so  extensively  advertised,  you  would  find  them  very  much 
more  comfortable  than  the  two  garments.  There  is  no  doubling 
of  garments  at  the  waist,  consequently  the  *01us'  is  cooler 
and  more  comfortable.  The  fit  is  much  better  than  is  the 
case  with  the  two  garments.  They  are  very  easy  to  put  on 
and  equally  easy  to  take  off;  much  easier  than  the  double 
garments,  one  of  which  has  to  go  on  over  the  head.  They  give 
absolute  freedom  of  action.  We  have  them  in  several  knitted 
and  woven  fabrics." 

If  the  customer  has  become  interested  in  the  "Olus"  union 
suit  it  is  then  time  to  suggest  that  there  are  finer  suits  at  $2.50 
and  Aree  dollars,  thus  possibly  making  a  sale  of  higher-priced 
goods.  The  paramount  point,  from  the  manufacturer's  stand- 
point, is  to  make  an  "Olus"  wearer  out  of  a  two-piece  under- 


ii 


H 


I ; 


"i 


11 


i( 


11 


S16 


THE  DEPARTMENT  STORE 


wear  user,  thus  making  one  blade  of  grass  grow  where  before 
there  was  none. 

ri^bM,^      ^'^^  ^"°P^^  ^^  ^^^  y^"  ^y-    Yes,  but  the 
BeCl^dy    ^^^^^  ^^^^  c^^  ^^  not  attempt  it,  and  the  average 
Instructed    or  better-than-average  sales  clerk  wUl  not  succeed  in 
doing  it  without  instruction. 

"So  far,  so  good."  you  say.  "But  how  am  I  to  get  at  the 
sales  clerk  to  train  him  in  this  very  desirable  method?" 

There  are  several  methods  that  may  be  tried.  I  cannot 
mention  all  that  are  possible;  indeed  many  will  not  occur  to  me, 
but  following  are  methods  that  I  have  known  to  be  successfully 
operated: 

1.  Let  the  manufacturer  secure  the  permission  of  the 
buyer  of  the  department,  and  possibly  the  general  manager 
of  the  store,  to  give  a  talk  or  to  have  some  well-qualified 
man  give  a  talk  on  salesmanship  to  the  sales  clerks  of  his 
department  or  to  a  group  of  salespeople  of  that  and  alhed 
departments.  Let  this  talk  be  on  the  fundamental  elements 
of  salesmanship,  with  the  specific  instance  of  the  **01us" 
transaction  above  outlined  brought  in  as  emphatically  as 
possible. 

^   2.  Induce  the  buyer  to  give  his  sales  clerks  instructions  cover- 
mg  the  "Olus"  illustration. 

3.  Prepare  a  booklet  covering  this  point  and  others,  and  se- 
cure permission  to  distribute  them  to  sales  clerks. 

4.  Induce  the  store  to  place  a  "P.  M."  or  special  bonus  on 
the  sales  of  your  specialty  which  you  cover  to  them  in  the  shape 
of  a  small  special  discount— that  is  if  granting  such  a  discount 
IS  not  against  your  policy. 

5.  Offer  prizes  to  be  given  weekly  or  monthly  to  the  clerk 
sellmg  the  greatest  number  of  your  specialty.  This  should  be 
done  through  the  buyer  and  with  the  permission  of  the  house 
only. 

6.  Supposing  that  your  line  were  "Olus"  underwear,  you 
should  see  to  it  that  the  buyer  and  his  assistants  and  the  sales 
clerks  wear  it  themselves.  If  they  approve  of  "Olus"  the  sales 
clerks  are  likely  to  take  their  cue  from  them. 

7.  See  to  it  that  the  display  man  is  enthused.  He  ought  to 
wear  "Olus,"  too,  and  so  should  the  advertismg  man.  There 
need  be  no  "graft"  nor  even  the  suggestion  or  suspicion  of 
anythmg  irregular  about  this.  It  is  only  intensive  salesmanship. 
When  the  sales  clerk  realizes  that  the  house  is  pushing  "Olus" 


THE  DEPARTMENT  STORE 


217 


by  window  displays  and  advertising  they  will  do  their  share 
more  readily  and  more  easily. 

Of  course,  if  the  manufacturer  does  not  co-operate  with  the 
store  fully  and  freely  he  will  probably  not  have  the  opportunity 
to  put  these  suggestions  to  the  test. 

On  the  other  hand,  if  he  meets  the  store  halfway  or  more  than 
halfway  on  every  reasonable  requirement  and  makes  valuable 

Star  Al    suggestions  for  sales  promotion  he  will  find  most 
ways  Rea-  stores  abundantly  willing  to  co-operate  with  him. 
sonable  in      If  the  manufacturer's  line  gives  as  ample  satisfac- 

Meeting    tion  as  does  the  "Olus"  underwear  here  taken  merely 

'^^"'*^  as  an  illustration,  he  should  not  find  it  difficult  to 
gain  co-operation  in  some  phase  as  outlined. 

And  remember  the  point  of  approach  to  the  store  is  not  alone 
along  the  line  of  percentage  of  profit,  though  needless  to  say 
that  is  important.  Of  great  importance  to  the  wise  merchant 
are  the  satisfaction-giving  qualities  of  the  goods;  their  power  of 
trademarking  and  trade-keeping;  whether  or  not  they  are  good 
"repeaters";  the  ease  with  which  they  may  be  sold,  and  how 
they  stand  in  the  opinion  of  the  buyer  and  possibly  one  or  more 
of  his  assistants. 

Here,  Mr.  Inquirer,  is  your  answer  which  I  trust  will  convey 
to  you,  and  others  who  read  it,  some  points  of  which  you  may 
be  able  to  take  advantage. 

W.  R.  Hotchkin,  who  was  for  ten  years  Advertising  Director 
and  Merchandise  Manager  of  John  Wanamaker,  and  who  is  now 
a  director  of  the  Cheltenham  Advertising  Agency  of  New  York, 
recently  wrote  on  this  question  under  the  title  "The  Terms  of 
Peace  Between  National  Advertisers  and  Department  Stores." 
Mr.  Hotchkin  takes  the  ground  that  there  is  an  actual  state  of 
conflict  existing  between  these  two  interests,  and  that  any 
settlements  between  them  must  be  in  the  nature  of  terms  of 
peace  in  which  mutual  concessions  are  made.  Mr.  Hotchkin 
says: 

♦The  pretentious  subject  imposed  upon  me  by  the  editors 
presupposes  a  state  of  war,  which  in  the  nature  of  things  is 


1 


*Pnnteri  lnl\  February  II.  10X5,  p.  8. 


I 


218 


THE  DEPARTMENT  STORE 


almost  unthinkable  between  two  branches  of  human  service 

so  vital  to  the  success  of  each  other.    And  yet  while  a  state  of 

war  has  not  actually  existed,  there  have  been  waste- 

i.The    ful  battles  waged  by  manufacturers  and  by  mer- 

S^ke     ^^^^^^  almost  continuously  during  the  past  decade 

Conflict    pr  two-     Friction  has  been  constant;  misunderstand- 
ing has  been   the  rule;  there  has  been  continuous 
unfair  treatment  altogether  causing  a  vast  and  almost  immeasu- 
rable waste  of  sales  and  profits  for  manufacturers  and  store- 
keepers. 

The  trouble  grew  up  during  that  marvellous  transition  period 
that  not  only  brought  the  full  development  of  advertising,  but 
also  brought  with  it  the  marvellous  growth  and  success  of  Ameri- 
can manufacturing. 

A  generation  ago  the  manufacturer  stood  on  the  merchant's 
doorstep  begging  him  to  buy  his  product.  The  merchant  then 
was  the  King  of  Commerce,  with  the  manufacturer  grovellmg  at 
his  feet. 

In  the  old  days  there  was  no  other  method  by  which  the  manu- 
facturer could  present  his  goods  to  the  consumer  than  by  having 
them  recommended  by  the  merchant  who  sold  them,  and  so  the 
pedestal  on  which  the  merchant  took  his  stand  grew  higher  and 
higher,  and  the  manufacturer  crawled  as  vermin  at  his  feet. 
This  condition  developed  the  merchant's  pretentious  attitude 
of  mind  which  became  the  chief  cause  of  the  friction  that  de- 
veloped later  on. 

One  day  a  manufacturer  conceived  the  idea  of  exploiting  his 
goods  to  the  public  for  himself.  He  determined  to  find  a  way 
to  impress  people  with  the  merits  of  his  commodity,  and  make 
them  go  to  the  merchant  and  demand  it.  Soon  several  other 
manufacturers  adopted  the  same  course.  Results  proved  the 
wisdom  of  the  undertaking.     .     .     . 

These  were  the  days  when  people  who  wanted  honest  mer- 
chandise asked  for  advertised  articles  and  were  told  by  plausible 
salespeople  that  the  other  articles  bearing  the  name  of  the  mer- 
chant were  "just  as  good." 

These  were  the  days  when  business  ethics  were  trying  to  dis- 
cover themselves;  when  the  honest  merchant  admitted  that 
he  was  not  a  sneak-thief,  but  when  other  people  could  scarcely 
recognize  the  difference.  These  were  the  days  of  the  bunco- 
steerer  and  the  green-goods  man.  Everj'thing  was  good  ethics 
and  good  business  if  you  could  get  the  money  and  get  away  with 


THE  DEPARTMENT  STORE 


219 


it,  inasmuch  as  it  was  common  policy  among  all  stores  to  sell 
people  other  goods  than  what  they  came  in  for. 

Merchants  considered  themselves  clever,  sagacious,  and  vic- 
torious when  they  succeeded  in  selling  one  hundred  gross  of  an 
article  bearing  their  own  trademark  to  a  public  that  was  vocifer- 
ously demanding  five  hundred  gross  of  the  advertised  article. 

Merchants  and  managers  spent  days  and  nights  trying  to 
teach  salespeople  to  sell  more  goods  to  the  customers  who  came 
into  the  store,  thinking  that  they  were  improving  the  efl&ciency 
of  their  establishment,  while  at  the  same  time  they  refused  to 
sell  people  hundreds  of  thousands  of  dollars'  worth  of  mer- 
chandise that  they  came  in  to  buy  with  the  money  in  their  hands, 
and  they  taught  these  same  salespeople  to  quietly  insult  and 
sneer  at  the  customers  who  asked  for  the  forbidden  articles. 

This  condition  was  absolutely  illogical,  impossible,  and  un- 
thinkable, but  hundreds  of  merchants  seemed  to  get  more  satis- 
faction out  of  telling  people  they  could  not  have  the  advertised 
merchandise  than  they  got  out  of  any  other  feature  of  their 
business. 

In  thousands  of  stores  from  one  end  of  America  to  the  other 
for  probably  ten  years  the  public  was  insulted  and  cheated  by 
having  sold  to  it  one  article  after  another  that  was  "just  as 
good"  as  the  goods  they  came  in  to  buy;  but  the  green-goods 
man  and  the  bunco-steerer  had  to  get  out  of  the  game,  and  "just 
as  good"  in  the  course  of  time  began  to  nauseate  people  who 
had  the  money  to  buy  the  goods  they  wanted. 

The  continual  foisting  upon  the  public  by  merchants  of  arti- 
cles bearing  other  names  than  those  of  the  makers  whose  prod- 
ucts they  wanted  had  its  natural  development.     Every 
S.  The  De-  customer  who  went  to  a  counter  naturally  knew  there 
velopment  ^^^  ^^^  selfish  reason  why  the  merchant  would  not 
sJpid^n  supply  the  exact  product  that  he  asked  for,  and  a  very 
great  feeling  of  resentment  began  to  arise  all  over  the 
country.     .     .     . 

At  last  the  manufacturer  had  learned  that  to  talk  man  to  man, 
face  to  face,  to  be  open  and  frank  and  aboveboard  was  the  way 
to  win  universal  patronage.  Thus  the  day  came  when,  instead 
of  sitting  back  and  waiting  for  the  indifferent  merchant  to  damn 
his  product  with  faint  praise,  the  wise  manufacturer  could  talk 
face  to  face  with  the  ultimate  consumer.  The  battle  was  all 
going  the  wrong  way  for  the  merchant.    He  was  putting  up  a 


« 


If 


^30 


THE  DEPARTMENT  STORE 


courageous  but  losing  fight.  Instead  of  glory,  he  was  winning 
dishonor;  instead  of  making  a  proud  name  for  himself,  he  was 
burying  his  business  under  a  cloud  of  suspicion;  instead  of  creat- 
ing a  bigger  value  for  his  trademark  name,  he  was  making  the 
reputation  of  a  crook,  and  making  the  public  more  determined 
than  ever  to  purchase  nothing  but  the  commodities  bearing  the 
trademarks  which  they  desired. 

Hundreds  of  big  merchants  are  to-day  continuing  the  thank- 
less battle.  They  are  still  guided  by  the  worn-out  superstition 
and  do  not  realize  that  it  is  the  business  of  a  store  to  supply  the 
commodities  demanded  by  the  public,  instead  of  insisting  on  the 
old-fashioned,  out-of-date  policy  of  trying  to  sell  something  to  the 
pubHc  that  the  public  does  not  want. 

A  few  merchants  have  come  to  realize  that  the  old  adage, 
"Quick  sales  and  small  profits,"  is  the  soundest  business  policy, 
and  that  the  modern  rendering  of  the  old  phrase  reads  "Quick 
turnovers  make  largest  net  profits." 

A  merchant's  private  trademark  belongs  in  the  attic  with  the 
old  days  of  buying  the  entire  season's  stock  months  ahead  and 
having  it  shipped  in  on  the  first  day  of  August  for  the  winter's 
business.  Modem  merchandising  calls  for  new  efficiency  to 
grease  the  chutes  of  commerce — ^to  eliminate  everything  that 
retards  quick  selling  and  rapid  turnovers. 

If  the  manufacturers  of  America  are  spending  upward  of  a 
billion  dollars  a  year  to  send  people  into  stores  to  buy  goods,  the 
shrewd  merchant  will  have  those  goods  for  sale.  He  will  never 
be  out  of  stock  of  anything  that  is  in  large  demand.  He  will 
never  send  people  across  the  street  to  his  competitor  for  goods 
that  the  customer  has  a  right  to  expect  to  find  in  his  store.  He 
will  not  tolerate  any  condition  that  makes  it  necessary  for  the 
salesperson  to  say,  "No,  madam,  we  do  not  have  those  goods." 

The  rapidly  growing  cost  of  store  promotion  must  begin  to 
turn  the  other  way.  Great  department  stores  are  to-day  spend- 
ing twice  as  much  money  as  they  should  spend  to  promote  their 
business.  Some  early  day  or  year  must  bring  advertising  dis- 
armament. The  cost  of  doing  business  is  frightfully  top-heavy. 
Such  conditions  could  endure  during  years  of  plenty  and  over- 
whelming prosperity,  but  a  far  greater  efficiency  is  demanded 
now. 

The  merchant  must  be  amply  stocked  with  goods  that  sell 
easily.  He  must  never  be  out  of  goods  that  people  ask  for  in 
large  quantities.    He  must  have  a  complete  store  and  he  must 


THE  DEPARTMENT  STORE 


221 


be  ready  to  receive  the  nimble  skpence  and  supply  on  the  instant 
the  goods  which  the  public  demands. 

To  spend  his  energy  and  money  in  exploiting  a  private  trade- 
mark is  going  into  competition  with  the  manufacturer  instead  of 
being  a  merchant.  The  realization  of  this  principle  is  developing 
a  new  kind  of  storekeeping — one  that  will  come  out  in  the  sun- 
shine because  it  has  no  deception  to  practise — no  customers  to  de- 
ccive — ^no  big-profit  goods  to  foist  on  an  unsuspecting  public.    .    . 

The  sympathy  of  the  whole  world  has  gone  out  to  Belgium 
because  all  of  her  sufferings  were  caused  by  reason  of  her  geo- 
graphical location,  though  neutral. 

The  buying  public  has  no  interest  in  the  battle  that  is  going 
on  between  storekeepers  and  manufacturers,  except  when  the 
public  becomes  the  chief  sufferer. 

The  merchant  and  the  manufacturer  may  be  able  to  protect 

themselves,  but  it  has  been  necessary  for  the  hand  of  the  law  to 

step  in  with  great  frequency  to  protect  the  public 

f  '^t'^^^bhom  being  hoodwinked,  badly  served,  or  actually  de- 

lictke  Chief  m       j   j 
Sufferer    "auded. 

During  the  transition  period  deceptive  goods  were 
forced  upon  the  public  when  they  thought  they  were  buying 
advertised  articles  and  goods  of  standard  quality. 

When  the  merchants  discovered  that  the  law  would  not  permit 
them  to  deceive  their  customers  in  this  manner  they  started  to 
punish  their  public  for  their  impudence  in  asking  for  merchandise 
they  did  not  desire  to  sell  by  refusing  to  supply  the  goods;  and 
the  well-educated  salesperson,  when  asked  for  the  trademarked 
article  that  was  not  being  sold,  simply  said,  "  I  am  sorry,  madam, 
we  do  not  sell  those  goods." 

Having  learned  that  it  was  against  the  law  to  give  substitutes 
they  spoke  as  though  the  question  were  closed,  waiting  for  the 
customer  to  say,  "Have  you  any  other  baking  powder?"  or 
soap,  or  whatever  the  article  might  be;  in  which  case  the  law  did 
not  forbid  them  to  show  their  goods  and  make  their  sale. 

But  this  method  of  merchandising  was  vastly  inconvenient  to 
the  public.     ... 

Practically  all  of  the  acts  by  manufacturers  in  opposition  to 
retailers,  and  by  retailers  in  opposition  to  manufacturers,  have 
usually  been  against  the  interests  of  each.  When  fighting  for 
some  object  that  seemed  vital  at  the  moment,  each  has  often 
partly  destroyed  a  large  factor  in  his  own  prosperity. 


il 


I  % 


222 


THE  DEPARTMENT  STORE 


But  neither  individuals,  nations,  nor  commercial  men,  impor- 
tant as  the  latter  consider  the  value  of  the  dollar,  can  ever  see 
the  uselessness  of  their  destructive  efforts  when  the  blood  is  hot 
m  the  midst  of  a  fight. 

Legal  restraints  have  done  good  in  that  they  have  compelled 
manufacturers  and  merchants  to  reflect,  first,  on  their  own  con- 
ditions of  doing  business,  and,  second,  upon  the  rights  and  ne- 
cessities of  those  with  whom  they  were  at  conflict. 

It  was  inevitable  that  in  the  course  of  time  manufacturers  and 
naerchants  would  fight  out  their  battle  and  come  to  rational  con- 
clusions; but,  because  of  the  extended  continuance  of  the  conflict, 
legislation  and  litigation  for  the  protection  of  the  pubhc  were 
necessary. 

The  store  is  to-day  recognized  as  a  place  of  public  service,  and 
the  pubhc  has  won  many  victories  in  its  fight  for  consideration-— 
m  reference  to  the  merchandise  with  which  it  shall  be  served,  the 
prices  that  it  Tvill  pay,  and  the  safeguards  and  protection  with 
which  it  shall  be  surrounded  when  buying  and  in  being  served. 

No  merchant  has  a  right  to  call  his  a  general  store  and  obhgate 
a  customer  to  make  a  long  journey  to  come  to  his  establishment, 
only  to  discover  that  the  goods  wanted  cannot  be  supplied  and 
that  another  journey  must  be  made  to  another  store  in  order  to 
secure  the  wanted  goods. 

And  this  increase  in  efficiency,  which  means  so  much  to  the 
convenience  of  the  general  public,  is  also  vital  to  the  success  of 
the  merchant.  It  is  a  fact  so  obvious  that  many  are  already 
recognizing  it,  and  it  seems  incredible  that  there  can  exist  to-day 
hundreds  of  merchants  who  are  still  fighting  against  their  own 
good,  losing  vast  volumes  of  sales  and  daily  destroying  public 
confidence  in  their  store,  aggravating  and  inconveniencing  their 
customers  because  they  refuse  to  sell  many  kinds  of  nationally 
advertised  merchandise  which  the  public  has  the  right  to  expect 
to  find  on  sale  in  every  complete  store  everywhere. 

The  very  first  act  toward  a  peaceful  condition  will  be  mutual 
1  TfeF'yt^^^^^^^^^^'       ^^^    manufacturers  must   forget    all 

Steps  to^^^^^^}^  ^d  friction  of  the  past.     In  your  present 

Peace  condition  of  strength  you  must  overlook  tlie  weaknesses 
of  temperament  and  the  ravages  that  superstition  has 
made  on  the  minds  of  the  merchants. 

You  must  realize  that  every  store  in  America  is  a  possible  in- 
creased outlet  for  your  product.    You  must  forget  the  petty 


THE  DEPARTMENT  STORE 


223 


aggravations  of  the  past  and  look  forward  to  the  enormously 
increased  prosperity  that  will  come  after  a  complete  state  of 
peace  is  secured. 

You  must  have  no  closed  doors  to  your  product.  You  must 
wipe  out  all  antagonisms  toward  them.  You  must  make  your 
proposition  to  the  merchant  in  an  absolutely  co-operative  form. 
You  must  help  him  to  be  assured  of  his  profit  while  he  is  creating 
larger  distribution  of  your  product. 

There  is  probably  no  commodity  on  sale  in  America,  no  matter 
how  great  its  success  may  be,  no  matter  how  complete  its  mo- 
nopoly of  the  market,  the  distribution  of  which  cannot  be  enor- 
mously increased  by  the  right  co-operation  on  the  part  of  mer- 
chants in  large  and  small  stores. 

You  merchants  must  get  out  of  your  minds  the  illogical 
thought  that  manufacturers  are  your  enemies.  You  must 
remember  that  yours  is  not  a  manufacturing  business.  There 
are  troubles  enough  in  retailing  without  adding  to  your  problems. 

The  wise  merchant  is  the  one  who  follows  the  line  of  least 
resistance,  who  sells  the  goods  that  people  want,  and  thus  creates 
the  largest  possible  volume  of  sales.  Of  course,  the  manufac- 
turer loses  large  added  distribution  by  reason  of  the  stores  that 
are  antagonistic  to  his  trademark,  but  the  merchant  must  not 
forget,  in  opposing  those  trademarks  and  in  seeking  to  make  a 
few  cents  or  dollars  more  on  articles  that  are  unknown  and  hard 
to  sell,  that  he  is  losing  every  day,  every  month,  and  every  year 
a  vast  volume  of  easy  sales,  because  he  does  not  take  advantage  of 
the  manufacturer's  big  national  advertising. 

What  a  gripping  dramatic  allegory  could  be  written  about  the 
short-sighted  manufacturer  who  covets  the  rich  widow's  mo^^ey 
(the  storekeeper's  distribution),  while  the  widow  (the  store- 
keeper) is  pining  for  a  strong  man's  protection  (the  manufac- 
turer's goods,  for  which  there  is  continuous  demand,  and  of 
which  there  is  practically  no  unsalable  stock).  But  the  man 
and  the  widow,  having  had  frequent  misunderstandings,  are  dis- 
trustful of  each  other  and  thus  kept  apart,  while  neither  will 
attain  the  fullest  happiness  and  prosperity  until  they  freely  join 
hands  in  the  wedlock  of  genuine,  whole-hearted  co-op)eration. 

With  more  than  six  hundred  millions  of  dollars  being  spent  by 
national  advertisers  every  year  to  send  people  into  stores,  we 
know  that  this  tremendous  advertising  impels  millions  of  people 
to  buy  the  goods  advertised,  and  if  six  hundred  millions  of  dollars 
can  be  profitably  spent  in  advertising  year  after  year  there  must 


224 


THE  DEPARTMENT  STORE 


be  billions  of  dollars'  worth  of  sales  created  for  tbe  advertised 
merchandise.  Yet  there  are  hundreds  of  merchants  so  blind  to 
these  great  modem  commercial  FACTS  that  they  are  still  re- 
fusing to  sell  these  goods  to  people  that  come  to  their  stores  and 
ask  for  them.  They  are  still  proving  to  thousands  of  would-be 
customers  that  they  have  incomplete  stores  or  that  they  are  not 
willing  to  have  any  business  that  does  not  pay  them  enormous 
profits,  and  they  are  driving  away  hundreds  and  thousands  of 
customers  every  year  into  the  stores  of  their  competitors  to 
spend  the  money  that  might  come  to  increase  their  own  volume 
of  business,  while  proving  to  these  customers  that  they  have 
a  narrow  and  questionable  policy. 

If  every  merchant  could  realize  the  suspicion  that  is  aroused 
m  the  minds  of  his  customers  when  he  insists  upon  showing  un- 
known goods  of  indefinite  value  when  they  ask  for  goods  of 
standard  quality  at  a  definite  price,  I  believe  he  would  soon 
realize  the  foolishness  of  the  old-fashioned  policy  for  which  he  is 
still  trying  to  fight,  for  it  must  be  remembered  that  customers 
who  go  to  a  store  for  advertised  goods,  and  are  sent  elsewhere  to 
buy  them,  are  going  to  go  elsewhere  for  their  other  merchandise 
also. 

Mutual  recognition  is  the  only  key  to  success  on  both  sides. 
The  merchant  must  recognize  the  fact  that  the  big  manufacturer, 
who  produces  merchandise  that  the  people  want,  is  necessary  to 
buildmg  up  the  volume  of  his  business,  but  he  must  meet 
the  modern  methods  of  the  big  manufacturers  with  a  whole- 
hearted business  spirit.  He  must  get  out  of  his  system  the 
petty  ideas  of  the  past  and  conduct  his  business  after  the  modern 
principles. 

The  cost  of  doing  business  in  a  retail  store  has  advanced  al- 
ready far  beyond  the  point  where  it  can  continue.  The  public 
cannot  continue  to  pay  30  per  cent,  of  the  price  for  being  served 
with  the  merchandise,  and  this  cost  of  doing  business  has  been 
piled  higher  and  higher  simply  because  merchants  have  insisted 
upon  doing  business  the  hard  way. 

The  nationally  advertised  merchandise  costs  only  a  half  or  a 
quarter  as  much  to  sell  as  goods  that  are  not  nationally  adver- 
tised. Most  of  these  commodities  are  sold  to  the  customer 
before  they  come  into  the  store.  Very  great  quantities  of  them 
are  sold  by  mail  and  by  telephone  orders.  I  am  sure  that  a 
thorough  analysis  of  selling  costs  would  show  that  there  is  a 
larger  net  profit  on  a  nationally  advertised  commodity,  showing 


THE  DEPARTMENT  STORE 


225 


a  gross  profit  of  25  per  cent.,  than  would  be  indicated  by  unad- 
vertised  merchandise  showing  a  gross  profit  of  33  J  per  cent. 

Nationally  advertised  goods  do  not,  as  a  rule,  require  very 
skilled  salesmanship,  and  rarely  takes  a  quarter  as  much  time 
to  make  the  sale  as  when  unknown  articles  have  to  be  shown  and 
demonstrated.  Merchants  who  have  realized  these  facts  are 
tremendously  increasing  their  volume  of  business,  and  it  is  to- 
day a  generally  accepted  fact  that  the  percentage  of  gross  profit 
is  far  less  important  than  the  number  of  turnovers  made  in  any 
stock. 

When  manufacturers  realize  the  possibilities  of  increased 
business — when  complete  peace  has  been  restored  and  when  the 
merchants  realize  how  greatly  they  can  increase  their  volume  of 
business,  their  turnovers,  and  their  net  profits  after  a  complete 
understanding  and  the  establishment  of  right  business  relations 
— ^peace  will  not  only  be  sought,  but  it  will  be  established  on  a 
basis  that  cannot  soon  be  overthrown. 

No  treaty  and  no  contract  are  worth  the  paper  upon  which 
they  are  written  unless  they  provide  conditions  that  are  abso- 
lutely just  and  right  to  both  parties  to  the  contract.  No  ar- 
rangement can  ever  continue  without  friction  unless 
■  6.  The  every  detail  is  thoroughly  understood,  recognized,  and 
p**^^  ^{t2  ^^sired  by  both  parties  to  the  contract.    There  must 

Treaty  ^  nothing  hidden,  there  must  be  nothing  that  can 
be  read  two  ways,  there  must  be  nothing  that  is 
unjust  to  either,  or  to  other  parties  who  make  similar  deals 
with  either  party  to  this  particular  contract. 

In  the  old  days  railroads  could  make  all  kinds  of  rebates. 
To-day  such  acts  are  against  the  law.  Why  should  a  thing  be 
wrong  as  a  railroad  policy  and  right  as  a  manufacturing  policy.' 
The  day  of  one  price  to  all  is  inevitable  as  the  ultimate  outcome. 
Until  that  day  arrives  the  friction  will  continue.  No  man  can 
be  just  while  desiring  to  get  the  best  of  his  competitor. 

In  the  old  days  a  man  of  real  honor  would  refuse  to  fight  an 
enemy  whose  sword  was  shorter  than  his.  He  would  refuse  to 
fight  a  duel  with  another  man  at  a  distance  that  his  weapon 
would  shoot  while  being  out  of  the  range  of  the  weapon  of  his 
opponent. 

There  can  never  be  a  treaty  of  peace  in  manufacturing,  store- 
keeping,  and  other  commercial  relations  until  this  sort  of  honor 
exists  among  merchants  and  manufacturers. 


!l 


i 


2i26 


THE  DEPARTMENT  STORE 


The  man  who  is  not  willing  to  fight  his  commercial  battle  on 
equal  terms  with  a  competitor  is  a  coward  and  a  weakling,  and  the 
success  that  he  makes  in  such  an  unequal  fight  will  always  be 
held  against  him  by  right-thinking  people.  There  is  never  any 
credit  in  a  victory  where  the  opponent  has  not  had  an  equal 
chance,  and  the  treaty  of  the  future  that  will  make  peace  be- 
tween the  manufacturer  and  the  merchant,  as  well  as  between 
all  the  distributors  of  merchandise  to  the  public,  must  be  defi- 
nitely based  on  equal  opportunities,  equal  prices,  rates,  and  dis- 
counts for  all.  No  other  condition  is  just  and  no  other  condition 
can  permanently  endure. 

The  friction,  the  misunderstanding,  the  limitation  of  real 
possibilities,  and  the  deception  of  the  public  will  continue  as  long 
as  unequal  conditions,  secret  rebates,  and  elastic  prices  endure. 
The  whole  commercial  world  should  honor  and  support  those 
manufacturers  who  are  fighting  for  the  absolutely  square  deal. 
They  are  knights-errant  of  twentieth-century  commerce.  They 
are  establishing  the  principles  that  will  bring  perfect  peace  in  all 
commercial  relations.  They  have  the  courage  to  quote  the  same 
price  and  the  same  terms  to  every  customer,  large  or  small,  and 
they  will  be  supported  by  every  merchant  who  understands  the 
meaning  of  justice  and  equity.  It  is  only  the  short-sighted 
ones,  the  gamblers,  the  seekers  of  easy  profit,  those  who  hope  to 
get  the  best  of  their  competitors  by  some  longer  weapon  or  un- 
derhand method,  who  have  any  other  idea  of  doing  business. 

Just  as  the  fixed  price  on  the  part  of  the  retail  merchant 
brought  the  day  when  people  could  buy  freely  in  stores,  knowing 
that  they  were  absolutely  safe,  so  the  fixed-price  policy,  thor- 
oughly established  by  manufacturers,  will  bring  the  day  when 
the  cost  of  buying  and  dickering  and  haggling  will  go  down  and 
the  time  spent  in  buying  merchandise  will  amount  to  only  a 
fraction  of  what  it  requires  to-day,  while  every  merchant  can  be 
sure  that  he  is  not  being  hoodwinked  and  cheated  by  the  people 
with  whom  he  does  business. 

It  seems  strange  that  the  merchants  who  recognize  the  fixed- 
I>rice  policy  at  retail  as  the  greatest  business  principle  ever  estab- 
lished in  storekeeping  should  not  recognize  that  exactly  the 
same  principle,  applied  to  their  own  buying,  is  their  only  possible 
hope  of  peace  and  greatest  prosperity. 

In  considering  the  policy  of  any  manufacturer  the  merchant 
should  ask  himself  the  question:  "Is  it  just,  is  it  equable,  am  1 
getting  all  that  any  other  dealer  is  getting,  am  I  going  to  be  able 


THE  DEPARTMENT  STORE 


%n 


to  feel  secure  about  the  price  that  I  am  paying  and  the  discounts 
and  dating  on  my  bill?  The  merchant  must  not  ask  himself: 
'*Have  I  hammered  this  man  down  to  a  lower  price  than  my 
competitor  pays,  have  I  gotten  a  larger  rate  of  discount  than  my 
cx)rapetitor  has  secured,  have  I  gotten  a  longer  dating  than  this 
manufacturer  is  giving  to  anybody  else  in  the  trade?** 

Of  course,  this  method  seems  revolutionary  to  old-fashioned 
merchants,  just  as  the  one-price  storekeeper  created  a  revolution 
when  that  policy  was  first  presented.  But  what  a  marvellous 
feeling  of  relief  came  to  the  customer  on  that  day,  who  began  to 
realize  that  he  did  not  have  to  do  an  hour's  haggling,  that  he  did 
not  have  to  go  back  to  the  store  several  times  after  making  a 
pretence  of  buying  the  goods  elsewhere  in  order  to  get  a  lower 
price  quoted. 

Exactly  this  same  feeling  of  security  and  time  saving  will  come 
to  the  merchant  when  he  faiows  that  the  first  price  quoted  is  the 
lowest  price  for  which  the  article  can  be  bought  and  the  lowest 
price  for  which  any  merchant  anywhere  can  buy  the  goods; 
when  he  can  be  absolutely  certain  that  the  discounts  cannot  be 
increased  by  hours  or  days  of  haggling;  when  he  realizes  that  the 
dating  is  definite  and  that  business  can  only  be  done  on  the  one 
honest  basis  for  all. 

The  buyer  of  merchandise  then  becomes  a  different  sort  of 
man.  He  develops  different  faculties.  All  of  his  ability  may 
be  developed  along  the  line  of  knowing  good  merchandise  and 
comparing  qualities  and  prices.  He  doesn't  have  to  develop 
himself  as  a  horse-trader.     .    .    . 

And  so  this  enormous  waste  of  time  is  eliminated.  The  vast 
cause  of  friction  is  eliminated.  The  merchant  and  manufac- 
turer can  respect  each  other  and  deal  with  each  other  face  to  face 
without  any  feeling  of  suspicion  or  uncertainty. 

The  merchant  recognizes  that  he  needs  the  manufacturer's 
advertised  goods  in  order  to  increase  his  volume  of  sales.  He 
recognizes  the  standard  quality  of  the  commodity.  He  knows 
that  the  manufacturer's  reputation  is  at  stake  and  that  the  qual- 
ity of  his  merchandise  must  be  always  the  same,  or  that  the 
loss  is  infinitely  greater  to  the  manufacturer  than  it  can  be  to 
the  merchant. 

He  recognizes  the  fact  that  thousands  of  people  are  going  to 
be  sent  to  his  store  as  a  direct  result  of  the  advertising  done  by 
the  manufacturer. 

He  reaUzes  that  the  sales  will  be  easily  and  quickly  made  and 


/I 


228 


THE  DEPARTMENT  STORE 


that  lie  will  hav^  a  very  large  turnover  of  the  merchandise,  with- 
out any  obligation  to  carry  a  large  stock  at  any  time. 

He  knows  that  he  can  get  his  orders  filled  promptly  and  in 
whatever  quantities  he  desires.  He  will  then  be  able  to  buy  just 
as  cheaply  in  one-gross  lots  as  in  hundred-gross  lots.  This  will 
improve  the  merchandising  conditions  in  his  store;  he  will  not 
have  to  carry  congested  stocks,  nor  be  worrying  about  unsalable 
goods. 

The  thing  that  the  manufacturer  is  fighting  for  and  which  the 
merchant  has  so  long  fought  against  will  be  discovered  to  be  the 
greatest  good  that  has  ever  been  brought  about  for  the  store- 
keeper. 

The  manufacturer,  of  course,  will  have  to  recognize  his  obliga- 
tion to  pack  and  ship  his  merchandise  in  quantities  that  will 
facilitate  efficient  merchandising  and  rapid  turnovers  for  the 
store,  and  he  will  have  to  co-operate  in  the  fullest  possible  man- 
ner by  providing  selling  helps  of  a  sort  and  character  to  fit  the 
conditions  and  the  pohcy  of  the  stores  who  distribute  his  mer- 
chandise. 

Both  merchant  and  manufacturer,  seeing  the  enormous  ad- 
vantage of  whole-hearted  co-operation  with  each  other,  and 
reaUzing  how  vital  it  is  to  the  success  of  each  to  co-operate  in  this 
manner,  will  each  endeavor  to  remove  all  obstacles  or  causes  of 
friction  that  might  interfere  with  the  smooth  and  continuous 
flow  of  sales  and  profits. 

Mutual  recognition  and  mutual  consideration,  with  the  one 
constant  policy  of  being  just  to  each  other,  is  fundamental  in 
creating  continuous  peace  and  greatest  prosperity,  both  for 
manufacturer  and  retailer. 


CHAPTER  VII 

THE  CHAIN  STORE  AND  NATIONAL  ADVERTISING 

IS  THE  chain  store  a  menace  to  the  whole  business  of  inde- 
pendent retailing,  or  is  it  an  economic  advance?  It  may  be 
both.  Its  independent  competitors  are  surest  is  the  former. 
Its  friends  are  sure  it  represents  a  gain  to  society  in  the  form  of 
lowered  costs  of  distributing  merchandise. 

We  have  at  hand  in  material  published  during  the  period  of 
advertising  history  under  review  material  on  three  phases  of 
chain-store  development  which  space  will  permit  us  to  cover, 
out  of  many  which  might  be  treated.  These  are  (1)  the  present 
size  of  the  chain-store  movement,  (2)  some  typical  chain-store 
methods,  and  (3)  some  concrete  instances  showing  how  chain 
stores  have  modified  the  distribution  problems  of  manufacturers 
covering  a  wide  market. 

By  far  the  most  comprehensive  study  of  the  subject  of  chain 
stores  thus  far  published  is  that  prepared  by  Charles  W.  Hurd 
and  M.  Zimmerman  of  the  Printers^  Ink  staff  in  the  latter  part 
of  1914.* 

♦September  10,  1914,  p.  3:  "Why  Advertisers  Must  Give  Chain  Stores 
Attention." 

September  17,  1914,  p.  63:  "Advertisers  and  Dealers  See  Danger  in  Chain 
Stores." 

September  24,  1914,  p.  22:  "Reasons  for  Belief  in  This  Danger." 

October  8,  1914,  p.  36:  "How  the  Chains  Are  Taking  Over  the  Retail  Field." 

October  15,  1914,  p.  71:  "Number  of  Chains  in  Each  Field." 

October  22,  1914,  p.  60:  "Concentration  of  Ownership." 

October  29,  1914,  p.  72:  "Advantages  in  Organizations  and  Financing." 

November  5,  1914,  p.  58:  "Advantages  in  Financing." 

November  12,  1914,  p.  58:  "Methods  of  Picking  Sites." 

November  19,  1914,  p.  64:  "Advantages  in  Buying." 

229 


1 


if 


230 


THE  CHAIN  STORE 


The  limit  of  our  space  will  not  permit  us  to  reproduce  these 
articles  in  full,  but  there  are  certain  sections  of  them  which  we 
shall  quote  at  length. 

(1)   THE  EXTENT  OF  THE  CHAIN-STORE  MOVEMENT 

In  the  fourth,  fifth,  and  sixth  articles  in  this  series  there  is  given 
a  summary  of  the  extent  of  the  movement  at  the  time  the  arti- 
cles were  prepared.  From  these  the  following  quotations  are 
drawn: 

♦Two  thousand  and  more  retail  chains,  in  all  lines,  of  three 
stores  and  more  each,  with  a  total  of  more  than  25,000  stores. 
IS  a  very  conservative  estimate,  based  three  quarters  on  careful 
mvestigation  and  verification. 

This  estimate  does  not  take  in  manufacturers'  agencies,  even 
where  the  manufacturers  are  suspected  of  being  part  owner;  or 
the  local  units  of  such  public  utilities  as  the  railroad,  telegraph, 
telephone,  express,  gas,  electric  light  and  power,  and  street  rail- 
way companies  which  in  some  respects  embody  the  same  prin- 
ciples as  do  the  chains,  but  are  all  more  or  less  of  the  nature  of 
enfranchised  monopolies;  or  the  co-operative  combines. 

It  includes  only  stores  or  services  in  the  competitive  field 
Jmked  by  acknowledged  common  ownership  and  conduct 
whether  operated  as  retailers'  or  manufacturers'  chain— such 
as  are  evidences  of  a  comparatively  recent  movement  toward 
actual  concentration  of  ownership  and  increased  centralization 
of  management. 

There  has  been  no  attempt  to  pad  the  list,  nor,  on  the  other 
hand,  to  draw  too  fine  a  line.  The  intent  has  been  to  let  the 
facts  speak  for  themselves. 

Compared  with  the  total  number  of  retail  dealers  of  all  kinds 
in  the  United  States,  the  figures  are  trivial.  Considered, 
however,  with  reference  to  the  chains'  proper  field,  the  cities, 

December  3,  1914,  p.  66:  "Advantages  in  Selling." 
December  10.  1914,  p.  46:  "Keeping  up  Trained  Organization." 
December  17,  1914,  p.  20:  "Emplo^-ment  of  Accounting." 
December  «4,  1914,  p.  66:  "Summary.*' 
^Printers  Ink,  October  8,  1914.  p.  36, 


THE  CHAIN  STORE 


231 


and  as  the  measure  of  their  activity,  chiefly  during  the  past  ten 
or  fifteen  years,  they  are  highly  significant. 
Here  is  the  estimate  by  fields : 


Field  Chains 

Grocery 500 

Tobacco t 250 

Newstands 2OO 

5c.  and  lOc,  etc 180 

Oil,  gasoline,  etc 5 

Drug 200 

Restaurants 100 

Pianos  and  Musical  Instruments 125 

Sewing  Machines  2 

Boot  and  Shoe 50 

Automobile  Accessories 50 

Clothing 50 

Dairies 40 

Coal [  40 

Miscellaneous,  other  lines lOO 

Butchers 75 

Dyeing  and  Cleaning 45 

Saloons lOO 

Shoeblack  Stands lOO 

Confectionery 40 

Lumber 50 

Laundries 45 

Theatres 15 

Drygoods,  Dep't  Stores,  etc 30 

Hats 25 

Jewelry 50 

Liquor  Stores 20 

Women's  Cloaks,  Suits,  etc 25 

Bakeries 25 

Banks 32 

Books 1 

Furniture jg 

Hotels 10 

Men's  Furnishings 35 

Hardware 15 

Automobile 10 

Florists X5 

Funeral  Directors \q 

Trunks  and  Bags 15 

Sporting  Goods 3 

Ticket  Agents 3 

Penny  Arcades 10 

Plumbing \q 

Millinery \q 

Motor  Trucks \\   \  5 

Stock  Feed 5 


Stores 

8,000 

2,500 

2,500 

2,000 

2,000 

1,400 

1,400 

1,000 

1,000 

700 

650 

600 

550 

500 

500 

450 

400 

400 

400 

315 

300 

275 

260 

250 

250 

200 

155 

150 

125 

125 

100 

100 

100 

90 

80 

70 

60 

60 

55 

53 

52 

50 

40 

35 

35 

35 


I 


J 

It! 


2S2  THE  CHAIN  STORE 

Optical 8  80 

Pnonograplu 1  so 

Barbers 5  25 

Electric  Supplies 5  so 

Corsets 5  ig 

Delicatessen 5  15 

Wall  Paper 5  15 

Gloves 8  10 

Furs 2  0 

Paper  Novelties 1  q 

Fountain  Pens 1  4 

Total 2.788     30.549 

If  we  throw  out  20  per  cent,  for  errors  in  collection  and  calcu- 
lation we  shall  still  have  more  then  2,000  veritable  chains. 

It  is  not  practical  and  it  would  be  irksome  reading  to  present 
figures  for  every  line  and  every  city  in  which  the  chain  is  a  phe- 
nomenon, but  it  is  worth  while  noting  that  Greater  New  York 
is  headquarters  for  830  chains  totalling  5,609  stores,  more  than 
one  eighth  of  all  the  chains  and  one  fifth  of  all  the  chain  stores. 
Here  also  are  figures  in  four  important  fields,  based  on  totals 
furnished  by  Boyd's  City  Despatch  and  the  National  5,  10,  25 
cent  Magazine^  tour  large  cities  being  taken  for  comparison,  to 
show  the  relation  of  the  chain  stores  to  independent  stores  in 
these  lines  in  the  most  congested  centres  of  population : 

OBOCEBm  Inde- 

Chain  pendent 

Total  Chains  Stores  Stores 

Greater  N.  Y 18,613  17  680  12,833 

Chicago 7,510  10  130  7.380 

Philadelphia 5,200  9  1,262  3,938 

Boston 2.829  10  456  2.373 

TOBACCX) 

Greater  N.  Y 2,394  0  439  1,955 

Philadelphia 2,350  5  45  2,305 

Chicago. 1,100  9  172  928 

Boston 808  i  16  292 

DBUOB 

Greater  N.  Y 2.281  U  82  2,199 

Chicago 1,106  4  17  1.089 

Philadelphia 921  12  58  868 

Boston 814  6  34  280 

FIYX-AmO-TKN-CXNT  STORES 

Greater  N.  Y 225  15  50  175 

Chicago 150  8  85  125 

I%iladelphia 145  4  20  125 

Boston 32  2  7  25 


THE  CHAIN  STORE 


23S 


In  New  York  City  there  are  some  2,000  variety,  notion,  and 
novelty  stores,  which  are  not  strictly  five-and-ten-cent  stores,  al- 
though they  compete  strongly  with  them  in  the  low-priced  lines. 
Other  cities  have  variety  stores  in  proportion. 

There  are  figures  at  hand  for  the  growth  of  independent  stores 
and  chain  stores  of  one  field  in  the  metropolis  during  a  period 
of  eleven  years,  and  nothing  better  shows  the  strides  of  the 
movement: 


Per 

1914 

Increase 

cent. 

13.513 

4.763 

54 

985 

770 

860 

ELEVEN  TEABS  IN  BETAIL  QBOCEBT  TBADE,  GREATER  NEW  TORE 

1903 

All  Stores 8,750 

Chain  Stores 215 

The  number  of  retail  groceiy  stores  in  Greater  New  York, 
that  is  to  say,  has  added  a  half  in  ten  years,  while  the  number  of 
chain  stores  has  nearly  quadrupled — grown  nearly  seven  times 
as  fast !  The  figures  for  the  specific  chains  are  given  on  another 
page.  Against  this  it  is  to  be  remarked  that  new  developments 
always  show  big  percentages.  Nevertheless,  the  outstanding 
fact  is  the  tremendous  growth. 

A  list  of  the  leading  chains  in  each  line  of  retail  business  must 
appeal  to  the  advertiser  and  advertising  man,  not  because  the 
chains  are  certainly  a  menace  to  advertising,  but  because  there 
are  many  j>eople  who  say  they  are. 

It  is  a  sweeping  charge.  It  would  be  surprising  if  there  were 
not  some  truth  in  it,  still  more  surprising  if  it  should  be  sus- 
tained in  its  full  weight.  It  is  not,  in  fact,  meant  to  be  taken 
so  comprehensively.  The  opponents  of  chain  stores  have  in 
mind  to  condemn  only  one  or  two  of  the  several  kinds  of  re- 
tailers* chain  stores,  and  not  every  chain  in  these,  nor  yet  again 
every  particular  method. 

The  objectionable  methods  are  several,  but  they  all  group 
around  price-cutting  and  substitution,  one  of  which  directly 
and  the  other  indirectly  tends  to  close  the  retail  channels 
of  trade  to  the  distribution  of  independently  manufactured, 
and,  above  all,  branded  and  advertised  products.  Inci- 
dentally, they  are  changing  the  channels  from  independent 
retail  to  chain  control — that  is  the  independent  retailer's  com- 
plaint. 

It  is  hardly  safe,  however,  to  generalize  in  the  circmnstances. 
Not  all  of  the  chams  are  price-cutters.    There  is  all  the  diflFer- 


i 


234 


THE  CHAIN  STORE 


I 


ence  in  the  world,  m  many  respects,  between  the  high-crade 
stores  like  Park  &  Tilford  and  the  Acker,  Merrall  &  Gondii 
Company  m  New  York  and  the  popular  low-priced  grocery 
chams.  The  former  cut  prices  on  some  articles,  like  cigars, 
when  there  is  a  price  war  on  and  they  have  popular  brands  of 
their  own  to  push,  but  for  the  most  part  they  base  theu-  busi- 
ness  on  service  and  not  on  price.  And  the  five-and-ten-cent 
variety  stores  hardly  if  ever  cut  prices  on  standard  or  advertised 
articles,  of  which  they  carry  a  number  in  five-and-ten-cent 
packages. 

Again  there  are  retail  specialty  chains,  like  the  hat  stores  of 
IruJy  Warner  and  Kaufman  in  New  York.     Each  handles  an 

RdaU     ^^^'"^^^^  ^^"^'  and  neither  retailer  nor  manufacturer 
Svecialty  '^^  ???  Complaint  to  make  of  them,  any  more  than  he 

Chains    would  in  regard  to  a  manufacturer's  chain  which  Knox 
the  hatter  conducts,  for  example. 

Even  the  chain  drug  stores,  which  have  been  chief  offenders 
in  the  past,  give  mdications  of  a  change  of  heart— and  head— in 
some  directions.  The  Owl  Drug  Company,  of  San  Francisco, 
built  up  its  business  on  price-slashing  and  was  cordially  dis- 
liked and  feared  by  its  independent  competitors.  To-day  its 
policy  is  changing.  When  it  goes  into  a  new  community 
it  advertises  serpice  and  not  cut  prices.  It  meets  the  cuts 
of  the  competitive  druggists,  but  does  not  often  go  below 
them. 

And  this  partial  abandonment  of  price  exploitation  in  favor 
of  straight  store  service  is  paying  in  these  new  communities 
it  has  entered.  Mr.  MiUer,  its  president,  tells  Printers*  Ink 
He  believes  price-cutting  has  almost  had  its  day  as  an  attraction 
and  something  else  must  be  substituted,  which  he  believes  to 
be  that  almost  indefinable  but  substantial  thing  called  service, 
rrice  will  always  be  a  factor,  he  beheves,  but  it  need  not  be  the 
factor  it  has  been. 

Like  other  large  chains,  the  Owl  company  has  its  own  private 
brand^manufacturing  some  of  them,  and  pushes  them  strongly. 
Ihe  Owl  chain  takes  in  twenty  stores. 

Nor  is  it  true  by  any  means  that  chain  stores  are  universally 
successful  Many  chains  have  failed  to  find  a  place  for  them- 
selves,  and  even  highly  successful  chains  cannot  always  manage 
to  make  a  store  stick  m  a  community.  It  takes  more  than  price- 
cutting  and  substitution  to  turn  the  trick,  and  in  the  course 
of  our  investigation  we  shall  see  why. 


THE  CHAIN  STORE 


235 


The  particular  point  to  be  observed  is  that  chains  are  not 

all  alike  in  the  methods  they  employ,  and  may  not,  therefore, 

in  every  chain  and  every  respect  constitute  a  "men- 

Not  Every  ^^^*y    j|.  jg  possible  to  conceive  of  them  as  partly 

Menace    8^^^  ^^d  partly  bad,  and  undergoing  within  their  own 

advanced  evolution  a  still  further  evolution.     The  case 

of  the  Owl  chain,  just  cited,  is  one  in  point.    The  abandonment  by 

the  United  Cigar  Stores  Company  of  its  former  over-aggressive 

methods  of  securing  favorable  locations  for  its  stores  is  another. 

We  have  been  regarding  the  chains  as  peculiarly  significant 
because  of  their  rapid  growth  and  theu-  relationship  to  depart- 
ment stores,  large  maU-order  houses,  and  buying  combines  as 
merely  differing  manifestations  of  the  same  tendency  toward 
concentration  in  the  distributing  field  that  had  previously  shown 
itself  in  the  producing  field.  There  seem  to  be,  broadly  speak- 
ing, four  different  kinds  of  chains: 

Retail  companies  or  corporations,  like  the  United  Cigar  Com- 
pany, F.  W.  Woolworth  Company,  Owl  Drug  Company,  Great 
Atlantic  and  Pacific  Tea  Company,  Mr.  Bowers'  Stores  of 
Memphis,  Childs*  Restaurants,  etc.  Some  small  chains,  par- 
ticularly in  the  growing  field,  are  said  to  be  owned  by  jobbers. 

Retail  buying  associations  or  combines^  like  the  United  Drug 
Company  ("Rexall"  stores),  American  Druggist  Syndicate 
("A.  D.  S.")»  Girard  Grocery  Company  of  Philadelphia, 
United  Buyers*  Service  for  five-cent,  ten-cent,  and  twenty-five- 
cent  stores,  etc. 

Manufacturers*  chains  of  retail  stores  or  branches,  like  W.  L. 
Douglas  Shoe  Company,  Hanan  &  Son,  Browning,  King  &  Co., 
Knox  Hat  Company,  Aeolian  Company,  etc. 

Consumers*  co-operative  retail  chains,  based  on  the  principle  and 
methods  of  the  huge  wholesale  co-operatives  of  Europe.  There 
are  believed  to  be  only  two  such  chains  in  this  country,  one  with 
headquarters  in  New  Jersey  and  one  with  headquarters  in  Cali- 
fornia, but  the  number  may  be  expected  to  grow  rather  fast, 
and  all  eventually  amalgamate,  as  they  have  done  abroad. 

Some  of  these  chains  end  by  being  very  much  hke  others. 
Browning,  King  &  Co.  started  out  by  being  clothing  manu- 
facturers and  now  handle  the  goods  of  other  manufacturers,  in 
other  lines,  in  their  retail  stores.  The  Kroger  Grocery  and 
Baking  Company  began  with  a  small  grocery  and  now  manu- 
factures its  own  candy  and  canned  goods  of  every  kind,  roasts 
its  own  coffee,  and  kills  its  own  pork.    The  American  Druggist 


286 


THE  CHAIN  STORE 


\ 


\ 


Syndicate  and  United  Drug  Company  are  jobbers  and  manufac- 
turers on  a  large  scale.  The  Western  buyers  combines  put  up 
some  of  theu-  private  brands. 

Besides  these  four  general  types  there  are  others  which  do 
not  fall  clearly  m  any  one  division,  but  stride  two  or  more;  and 
some,  which,  while  coming  under  one  ownership,  are 


r 


Stores  1  Y  "1 — L  "• — "  ™*f"6  ""'^^i  v"c  uwiicrsnip,  are 
Managed  Clearly  not  chams—chams  implying  not  merely  unity 
LocaUy  Of  Ownership  but  some  unity  of  management,  policv, 
^PT^»5^«-  .  The  28  Claflin  stores  were  owned  and 
fananced  by  the  Claflin  company,  a  jobber  in  the  drygoods  field, 
but  they  were  individual  m  every  other  respect.  The  Claflin 
company  had  to  compete  for  the  business  of  the  stores  and  a  cood 
deal  of  the  time  did  not  get  it.  It  is  so  with  most  of  the  other  de- 
partment-store chams.  Gimbel's  and  the  May  department  stores 
have  local  management  and  buyers,  and,  to  a  certain  extent, 
individual  policies.  They  are  too  vast  to  be  very  closely  unified. 
1  J  <fe  clothing  field  there  is  the  Besse  System  of  New  Eng- 
land, half  a  straight  retail  chain  and  half  a  wholesale  buviiTe 
association  The  central  system  takes  the  local  merchant  as 
partner.  Many  chams  give  their  local  managers  a  small  stock 
mterest ;  the  Besse  plan  is  on  a  more  generous  scale. 

In  this  same  field,  as  well  as  in  others,  it  is  a  common  practice 
for  manufacturers  to  own,  control,  and  operate  whole  depart- 
ments m  certam  department  stores,  and  also  actually  to  finance 
promising  young  merchants,  in  order  to  have  assured  outlets 
tor  their  Imes.  This  is  more  than  a  mere  extension  of  credit 
and  goes  far  beyond  the  agency  system,  although  doubtless 
having  its  origin  m  it. 

In  some  fields,  the  drygoods  field  particularly,  there  are 
resident  buyers  who  represent  as  many  as  a  hundred  or  more 
stores  and  secure  for  them,  through  this  policy  of  pooling  their 
buying  power,  the  advantage  of  quantity  discounts  not  other- 
wise obtamable.  The  stores  are  unconnected;  they  are  not 
Cham  stores  m  any  sense;  but  they  must  not  be  lost  sight  of  as  a 
germane  factor. 

President  Musher,  of  the  Pompeian  Company,  importers  of 
l-ompeian  Ohve  Oil,  makes  an  interesting  classification  of  chain 
Three     ^^^^^  ^  *^®  growing  field,  which  will  also  apply  in 
Kinds  of  f^^^  <iV^®r  ^es.    After  stating  that  he  had  never 
Chains    been  able  to  decide  for  himself  whether  or  not  chain 
stores  had  been  harmful  or  beneficial  in  the  promo- 
tion of  the  sale  of  Pompeian  Oil,  he  says: 


THE  CHAIN  STORE 


237 


"I  put  chain  stores  in  three  classes.  One  class,  which  is  the 
minority,  sells  all  goods,  including  advertised  products,  at  a 
certain  percentage  over  cost.  They  don't  use  advertised  goods 
as  leaders  to  get  people  into  the  stores  to  buy  articles  on  which 
long  profits  are  made,  but  cut  prices  on  everything,  making  a 
uniform  profit  on  all  that  they  sell.  The  Mr.  Bowers'  Stores 
of  Memphis  are  in  this  class. 

"Another  class  is  chain  stores  that  use  advertised  goods  only 
as  leaders  and  pay  their  clerks  premiums  to  switch  customers 
to  private  brands  or  *  long-shot'  goods  when  they  ask  for  an 
advertised  brand. 

"The  third  class  is  chain  stores  that  never  handle  nationally 
advertised  goods,  but  put  up  practicaUy  everything  under  their 
own  brand.  Wliile  these  people  are  fighting  advertised  goods 
by  not  handling  them,  they  are  really  more  to  be  respected 
than  the  class  of  chain  stores  who  use  advertised  products  only 
as  leaders." 

This  is  a  vital  classification  and  will  be  considered  at  length 
under  the  heads  of  pricing  and  selling  in  subsequent  articles. 

This  disposes  of  the  diflFerent  elements  in  the  problem,  and 
we  may  now  consider  the  various  chains  in  the  different  fields. 
W.  H.  Ingersoll,  who  has  given  a  good  deal  of  attention  to  the 
subject,  sets  the  number  of  chains  in  the  country,  roughly,  at 
10,000.  The  investigation  made  by  Printers*  Ink  during  the 
past  two  or  three  months  brings  to  light  some  1,500  Imown 
chains  of  3  to  1,100  stores  each.  Possibly  half  as  many  again 
small  chains  have  been  overlooked  or  not  reported.  It  would 
take  months  more  and  the  expenditure  of  a  far  larger  sum  than 
has  already  been  laid  out  to  get  an  exact  record  of  the  number 
and  names  of  the  chains  in  each  field,  no  census  of  the  sort  ever 
having  been  attempted  before.  Absolute  comprehensiveness 
is  not  necessary,  because  a  list  of  even  such  names  as  are  in 
hand  would  themselves  occupy  several  pages  of  Printers*  Ink, 
and  would  be  of  no  practical  use  beyond  caUing  attention  to  the 
importance  of  the  retail  development. 

We  should,  however,  be  inclined  to  think  that  10,000  is  an 
overestimate,  and  that  the  number  of  chains  might  run  from 
2,000  to  2,500.  The  exact  number  is  of  less  significance  than 
is  the  rapidity  of  growth,  which,  as  before  pointed  out,  is  nothing 
less  than  phenomenal. 

Chain-store  concentration  is  chiefly,  of  course,  though  not 
exclusively,  the  accompaniment  of  concentration  in  population. 


f88 


THE  CHAIN  STORE 


New  York  City  has  a  high  proportion  of  all  the  chains.  Phila- 
delphia is  a  city  of  grocery  chains.  Drug  chains  have  flourished 
in  New  England.  They  are  not  the  product  of  the  place  and 
the  times  alone,  but  of  the  man  also.  The  United  Cigar  Stores 
Company  started  in  a  middle-size  city,  Syracuse.  The  United 
Drug  Company  started  in  Boston.  The  American  Druggists' 
Syndicate  was  organized  in  Brooklyn,  but  a  Western  promoter 
did  It.  Penny's  chain  of  so-called  "Golden  Rule"  stores  had 
their  first  headquarters  in  the  West.  And  there  are  plenty  of 
small  communities  close  together,  particularly  in  the  East, 
served  by  chains  of  three  or  four  grocery  or  drug  stores  owned 
and  managed  by  one  merchant.  The  tendency  is  rather  that 
way.  Where  the  old-time  merchant  invested  his  savings  in 
real  estate  or  became  a  silent  partner  in  other  ventures  in  the 
town,  he  is  now  inclined  to  invest  his  earnings  where  he  can 
capitalize  his  experience  and  depend  only  on  himself— that  is 
to  say,  in  more  stores. 

*The  largest  number  of  chains  is  in  the  grocers'  field,  prob- 
ably 500,  or  a  quarter  of  all  the  chains,  with  a  total  of  more  than 
8,000  stores.  This  is  something  less  than  5  per  cent,  of  the 
171,200  grocers  in  the  United  States.  But  in  the  cities  the 
chain  stores  frequently  do  more  than  25  per  cent,  of  the  busi- 
ness; in  Philadelphia  between  60  and  70  per  cent. 

From  another  source  comes  information  that  90  per  cent,  of 
all  grocers  are  independent  dealers,  and  that  the  balance  of  10 
per  cent,  is  divided  between  chain  stores  and  mail-order  houses. 

By  "chains"  it  is  perhaps  necessary  to  repeat  that  we  mean 
groups  of  retail  stores  under  one  ownership  and  direction.  We 
have  estimated  there  are  more  than  2,000  such  chains  of  all 
kinds  in  the  United  States,  with  a  total  of  more  than  25,000 
stores,  exclusive  of  retailers'  co-operative  jobbing  of  manu- 
facturing combines,  of  which  latter  there  are  hundreds,  incor- 
porated and  unincorporated,  and  exclusive  of  mere  agencies. 
We  have  noted  some  of  the  more  important  of  these  combines, 
but  we  have  not  counted  them  in  the  figures.  For  the  same 
reason  we  have  excluded  from  our  list  syndicate  ownerships 
which  are  not  centrally  managed.  It  is  often  hard  to  make  a 
distinction,  but  the  principle  will  be  recognized  as  sound,  and  the 
evidences  of  its  operation  as  significant.     As  all  of  the  chains  are 

^PriiOeri  Ink,  October  15.  1914,  p.  71. 


THE  CHAIN  STORE 


239 


growing — the  larger  ones  at  the  rate  of  one  or  two  stores  a  week — 
the  figures  were  absolute  only  on  the  day  they  were  reported; 
they  are,  however,  as  accurate  as  it  is  possible  to  get  them. 

A  few  of  the  leading  chains  in  the  grocery  field  were  named  in 
the  first  article  of  the  series.  The  following  list  is  a  larger  one, 
but  is  less  than  one  tenth  of  the  whole  number,  to  publish  which 
would  call  for  too  much  space. 


GBOCERT  CHAINS 

Stores 

Great  Atlantic  &  Pacific  Tea  Co.,  Jersey  City 807 

Acme  Tea  Co.,  Philadelphia ',  315 

James  Butler  Grocery  Co.,  New  York \,\,  .233 

Childs  &  Co.,  Camden,  N.  J 230 

Grand  Union  Tea  Co.,  Brooklyn 2OO 

Kroger  Grocery  &  Baking  Co.,  Cincinnati 182 

M.  O'Keefe,  Inc.,  Gardner,  Mass 145 

Wm.  Butler,  Philadelphia * '  ]  140 

Bell  Co.,  Philadelphia 130 

Robinson  &  Crawford,  Philadelphia 130 

National  Grocery  Co.,  Jersey  City 126 

Direct  Importing  Co.,  Inc.,  Boston 125 

Thos.  Roulston,  Brooklyn 121 

John  T.  Conner  Co.,  Boston hq 

G.  M.  Dunlop  Co.,  Philadelphia lo^ 

Valley  Supply  Co.,  Pittsburgh 65 

Union  Supply  Co.,  Pittsburgh \\\  63 

Voss  Grocery  Co.,  Cincinnati 02 

C.  F.  Smith  &  Co.,  Detroit '.'.'.'.'.'.'.'.'.'.'.  61 

Federal  Supply  Co.,  Pittsburgh \\  57 

James  Van  Dyk«  Co.,  New  York 55 

S.  K.  Ames,  Boston , .  55 

Daniel  Reeves,  Inc.,  New  York \  \\  52 

Mohican  Co.,  New  York \\  50 

Andrew  Davey,  New  York 49 

Standard  Tea  &  Grocery  Co.,  Indianapolis 43 

H.  G.  Hill  Grocery  &  Baking  Co.,  Nashville,  Tenn 48 

L.  W.  Rogers  &  Co.,  Atlanta \\  45 

C.  D.  Kenney  Co.,  Baltimore 45 

Acker,  Merrall  &  Condit  Co.,  New  York 45 

Mr.  Bowers'  Stores  Co.,  Memphis 43 

National  Tea  Co.,  Chicago !!!.!.!  41 

Sanitary  Grocery  Co.,  Washington,  D.  C 34 

H.  C.  Bohack  Co.,  Brooklyn,  N.  Y '.'.'.'.'.'.'.'.'.  33 

Jas.  W.  Crook,  Baltimore,  Md *  32 

L.  J.  Christopher  &  Co.,  Los  Angeles,  Cal 30 

A.  H.  Phillips.  Springfield,  Mass 29 

Fisher  Bros.  Co.,  Cleveland 28 

A.  F.  Beckman  &  Co.,  New  York 25 

Fisher  Bros.  &  Co.,  Cleveland 28 


|k. 


r 


I 


240 


THE  CHAIN  STORE 


John  H.  Kamman  Co..  Buffalo ^^^ 

Nelson  Company,  New  Orleans fs 

Acme  Stores.  Akron,  O ot 

Eureka  Stores.  Windber,  Pa.. .!'.!" ! ^ 

EastemEstoteTeaCo.,  New  York....  ai 

Jones-Hughes  Co.,  Louisville  (Quaker  Maid  Stores) lo 

Donohoc's.  Inc.,  Pittsburgh in 

Gristede  Bros.,  Inc.,  New  York Q^^ 

Foltx  Grocery  &  Baking  Co.,  Cincinnati,  6.. . .  la 

Red  Star  Grocery  Co.,  Wheeling,  W.  Va Jq 

P.  Parker,  New  York ....     .               {2 

Progressive  Grocery  Stores,  New  York S 

£.  E.  Gray.  Boston ,a 

Basket  Stores,  Inc.,  Lincoln,  Neb ia 

Park  &  Tilfoitl.  New  York \q 

E.  P.  Nelson  &  Co.,  Everett,  Wash {X 

A.  B.  Rory  Grocery  &  Baking  Co..  Canton.  6 in 

Cobb.  Bates  &  Yerxa  Co.,  Boston 7 

Rnley  Acker  Co.,  Philadelphia ''.'• '.'•'.'.'.'.'.'.'.'.'.'.'.'.'.'.'.'. '.'.'.'.  4 

The  Great  Atlantic  and  Pacific  Tea  Company  is  the  largest 
and  among  the  oldest  of  the  chains,  dating  back  almost  to  the 

One  of    ^i^^.W^''-     I^  is  practically  all  owned  by  George  H. 
I  Oldest,     Hartford,  of  Jersey  City,  and  his  sons,  and  no  figures 

Chaint  are  given  out  as  to  its  earnings;  but  its  capital  is 
$2,100,000,  and,  from  the  fact  that  it  is  continuously 
expandmg,  it  is  believed  to  be  very  prosperous.  It  is  not  a  rabid 
price-cutter  and  does  business  along  rather  conservative,  although 
progressive,  lines.  It  gives  out  a  trading  stamp  of  its  own 
and  advertises  locally  on  a  fair  scale.  It  imports  teas  and  coffees 
by  the  shipload  and  buys  up  the  crops  of  an  entire  countryside. 
It  does  no  manufacturing. 

The  Kroger  Grocery  and  Baking  Company,  of  Cincinnati, 
IS  one  of  the  most  aggressive  and  fastest  growing  of  the  grocery 
cAains.  Like  many  another  business,  it  was  built  up  from  a 
shoestring— m  this  case  exactly  $372.  B.  H.  Kroger  began  with 
one  grocery  and  a  delivery  route.  His  chain  grew  gradually 
he  took  over  sixty  stores  of  a  rival  chain  in  1908  and  a  year  or 
two  ago  absorbed  the  Maurer-Remley  Meat  and  Grocery  Com- 
panj%  of  St.  Louis.  He  has,  as  mentioned  in  a  preceding  para- 
^^aph,  gone  extensively  into  manufacturing  for  his  chain. 
Ihe  company's  sales  last  year  were  about  $10,000,000  on  a  capi- 
tal  of  $2,000,000.  Kroger's  success  appears  to  have  come  most 
largely  from  rapid  turnovers,  especially  on  staple  goods,  which 
he  cuts  way  below  the  market  price.    Advertised  goods  like*. 


THE  CHAIN  STORE 


241 


wise  suffer.  Kroger  has  always  been,  from  the  beginning,  a 
consistent  and  persistent  local  advertiser.  He  is  a  wholesaler, 
also,  to  small-town  grocers. 

Mr.  Bowers'  Stores,  of  Memphis,  were  described  too  recently 

in  Printers*  Ink  to  call  for  more  than  a  word.     Bowers  is  one  of 

the  greatest  price-cutters  in  the  country  in  the  grocery 

B^ra'  line.  He  takes  a  certain  profit  above  the  cost  of  doing 
Suyrea  businessand  cuts  remorselesslyto  that  line  on  all  goods, 
advertised  as  well  as  others,  and  has  reasons  for  it, 
which  we  will  take  up  in  season.  He  is  a  strong  advertiser, 
dividing  the  cost  among  his  stores,  as  do  most  other  chains  in 
localities  where  a  number  of  their  stores  are  bunched.  He  has 
a  bakery,  but  no  other  manufacturing  facilities.  He  owns  a 
wholesale  grocery,  but  manages  the  business  independently. 

James  Butler  Grocery  Company,  of  New  York,  is  typical 
of  a  large  number  of  grocery  chains.  It  cuts  prices,  gives  trad- 
ing stamps,  pushes  its  own  numerous  brands  aggressively.  Its 
business  is  conducted  on  a  price  basis.  The  auBborized  capital 
is  $10,000,000;  earnings  not  made  public. 

The  Acme  Tea  Company  is  the  largest  of  the  Philadelphia 

chains  and  has  branches  not  only  in  that  city  but  throughout  New 

Jersey.     It  has  apparently  prospered  very  greatly  on 

OvmTrad'  Pfice-cutting,  pushing  its  own  brands,  which  it  values 

ing  Stamps  ^^S^^Y*  and  advertising  locally  in  Philadelphia.    It  puts 

out  trading  stamps  of  its  own.    Like  other  chains,  it 

buys  in  huge  quantities.     It  has  its  own  baking  plant. 

The  Childs  Company  has  added  200  stores  since  1908.  It  is 
the  only  chain  in  Philadelphia  that  does  not  give  trading  stamps. 

The  Acker,  Merrall  &  Condit  Company  and  Park  &  Tilford 
have  been  mentioned.  They  are  the  highest  type  of  grocery, 
carrying  large  and  varied  stocks  and  maintaining  prices  on  ad- 
vertised brands,  though  handling  also  many  lines  of  their  own. 

The  Girard  Grocery  Company  is  the  wholesale  or  jobbing 
co-operative  established  by  independent  retailers  of  Philadelphia 
to  offset  the  destructive  competition  of  the  chains.  Philadelphia 
is  a  city  of  chains  in  the  grocery  line.  The  Girard  company  held 
its  business  meeting  a  few  weeks  ago  and  showed  a  total  volume 
of  $2,032,872  business.  The  capital  is  $121,453.  It  has  no 
private  brands  but  works  in  harmony  with  national  advertisers. 
It  is  subsidiary  to  the  Retail  Grocers'  Association,  and  was  in- 
corporated because  of  the  jobbers'  objection  to  it  as  a  buying 
combine.     It  has  a  membership  of  470  grocers.  " 


t 


342 


THE  CHAIN  STORE 


The  United  Groceries  Company,  of  Pittsburgh,  was  incorpo- 
rated in  Delaware  last  year  with  a  capital  of  $10,000,000.  On 
the  same  day  the  Pittsburgh  Wholesale  Grocery  Company  was 
incorporated  with  a  capital  of  $1,000,000.  The  former  corpora- 
tion has  now  increased  its  capital  to  $16,000,000.  The  general 
scheme  is  to  establish  a  chain  of  wholesale  grocery  houses — co- 
operative buying  combines — across  the  country  with  the  United 
Groceries  Company,  of  Toledo,  a  grocers'  combine,  doing  the 
buying  for  all,  and  eventually  to  have  all  articles  sold  under 
their  private  brand  called  "Un-gro-co."  The  project  is  ambi- 
tious, but  thus  far  the  efforts  of  the  incorporators  appear  to  have 
been  confined  to  getting  the  Pittsburgh  house  under  way. 

The  Federal  Supply  Company,  mentioned  in  the  table  as 
having  57  stores,  is  a  chain  of  what  is  known  as  "company 
„^  stores"  for  the  miners,  in  this  case  conducted  for  the 

^^P^y  Monongahela  River  Consolidated  Coal  &  Coke  Com- 
pany and  the  H.  C.  Frick  Coal  Company.  There  are 
a  large  number  of  chains  of  this  sort,  among  them  the  30  Eureka 
stores  at  Windber,  Pa.;  Consolidated  Coal  Company,  Fairmont, 
W.  Va.,  and  W.  J.  Rainty  and  Dull  Mercantile  Company,  in 
western  Pennsylvania. 

Other  ventures  are  announced  from  time  to  time.  Just  now, 
in  the  East,  the  All-Package  Grocery  Stores  Company,  of  New- 
ark, N.  J.,  is  seUing  stock  in  its  $1,000,000  company,  whose 
prospectus  states  that  it  will  go  into  manufacturing  and  baking 
and  start  a  chain  of  grocery  stores  in  Greater  New  York  that 
"will  startle  the  grocery  world."  Prominent  business  men  of 
Newark  are  behind  the  company. 

Another  significant  development  in  the  field  is  mentioned  by 
J.  C.  Simmons,  secretary  of  the  Washington  Retail  Merchants' 
Association,  Inc.,  of  Seattle,  and  editor  of  the  Northwestern  Mer- 
chant, who  writes: 

"The  hardest  competition  which  the  retail  grocer  of  Seattle 
has  is  the  so-called  *public  market.'  These  are  four  in  number, 
the  buildings  being  quite  large  and  owned  by  private  individuals, 
the  same  being  divided  into  very  many  small  stalls  and  rented  to 
small  dealers.  Many  of  them  are  running  general  grocery  de- 
partments, and  many  of  them  are  specializing  on  different  food 
products.  There  are  restaurants,  coffee  houses,  fruit  stands, 
vegetable  stands,  creameries,  and,  in  fact,  every  kind  in  the  food 
line.  I  should  estimate  that  there  are  between  600  and  700  stalls 
in  these  four  markets  operated  by  individual  people. 


THE  CHAIN  STORE  243 

"These  markets  are  very  well  furnished,  that  is,  as  to  paint 
and  electric  light  fixtures,  etc.,  making  them  very  attractive. 
They  are  very  extensively  supported  by  the  people.  Fruits, 
and  especially  green  vegetables,  are  sold  remarkably  cheap. 

"The  mimicipality  also  has  a  long  shed,  most  of  which  is 
leased  in  small  stalls  daily  to  the  farmers." 

Various  municipaHties  are  attempting  to  revive  and  make 

permanent  the  pubhc  markets  of  our  forefathers.     New  York 

City  has  four  of  them.     It  is  possible  that  some  of 

Pvhlic     them  will  prevail  in  some  form.    However  they  fare, 

^^Hd^    and  whatever  the  public  benefit,  they  take  out  of  the 

Chains  grocer's  pocket  his  profits  on  green  groceries  and 
lessen  his  capacity  for  distribution.  As  the  little  in- 
dependent grocer  needs  every  small  profit  more  than  the  large 
chain  and  generally  has  no  private  brands  on  which  to  make  up 
his  losses,  the  general  effect  of  the  establishment  of  pubUc  mar- 
kets is  to  hasten  the  decay  of  the  small  independent  grocer. 

In  an  eariier  article  figures  were  given  showing  the  growth  of 
grocery  stores,  both  individual  and  chain,  in  Greater  New  York 
during  the  period  from  1903  to  1913.  Below  are  the  figures  for 
each  chain  that  has  buying  headquarters  in  this  city: 

DEVELOPMENT  OF  GEOCEBY  CHAINS  WITH  HEADQUABTEE8  IN  NEW  TOBK  CITT 

Name  1003  1914 

James  Butler  Grocery  Co 60  238 

Grand  Union  Tea  Co 45  20? 

Thos.  Roulston .»  1*} 

James  Van  Dyke  Co •  •  *J 

Daniel  Reeves.  Inc ^^  J* 

Mohican  Co ••  JJ 

Andrew  Davey *5  t! 

Acker.  MerraU  &  Condit  Co «  « 

Oppenheimer ^  ^ 

Bohack  Co «  fj 

Beckman  &  Co IJ  »J 

Eastern  Estate  Tea  Co \  «J 

Gristede  Bros..  Inc «  »2 

P.  Parker *  JJ 

Park  &  Tilford «  J2 

Thos.  Healey J  1|? 

Progressive  Grocery  Stores ^  * 

t215    985 

♦Declined  to  give  information,  but  chains  were  much  smaller. 
^Figures  for  two  chains  missing. 


I 


244 


THE  CHAIN  STORE 


The  Great  Atlantic  &  Pacific  had  200  stores  in  1903  and  have 
807  in  1914.  It  is  the  only  outside  chain  operating  grocery 
stores  in  New  York  City. 

It  is  in  the  grocery  field  that  the  buying  combines  most  flour- 
ish.    The  field  is  probably  the  least  stable  of  all;  store  owner- 
(imr^M  ••«  5^*P^  *^  constantly  changing;  the  loosest  practices 
jSJ^V   ^"^'^^^^   *°^   *'°^^^*   generally   prevail;   in   other 
ConUrinei  Words,  a  condition  where  a  very  little  of  efficiency  will 
go  a  long  way  and  where  a  good  deal  of  efficiency  has 
produced  glittering  dividends. 

Buying  combines,  exchanges,  or  associations  are  approved 
economies  to  the  retailer  members,  but  they  call  for  a  strong 
sense  of  organization  and  solidarity.  This  sense  will  doubtless 
increase,  but  at  present  a  large  proportion  of  buying  combines 
are  said  to  have  been  unsuccessful.  The  usual  arrangement  is 
for  the  combine  to  acquire  a  warehouse  and  hire  a  manager;  and 
for  each  member  to  place  orders  with  cash  accompanying  and 
take  away  the  goods  himself.  WTien  the  combine  breaks  down 
It  IS  almost  invariably  because  some  of  the  members  cannot  or 
do  not  pay  cash.  They  either  extort  credit  from  the  combine 
manager  or  place  their  orders  with  the  jobbers.  The  net  result 
IS  the  sanae.  Sometimes  the  members  quarrel  and  get  to  cutting 
pnces,  with  the  effect  of  sacrificing  the  saving  made  in  buying. 
But  there  are,  nevertheless,  many  successful  buying  combines, 
and  they  must  increase  in  number  and  efficiency,  so  long  as 
present  conditions  continue  and  the  chains  and  mail-order 
houses  flourish. 

Conditions  in  the  drug  field,  where  the  next  largest  number  of 

chams  obtain— probably  about  200,  with  a  total  of  approximately 

In  ths     ^'^^  ^**^^*  ^^^  ^^  ^  grand  total  of  45,000  in  the  coun- 

DmgFidd^^^^  very  different.     In  most  communities  the 

drug  store  is  a  more  or  less  general  store.     In  the  large 

cities  It  seems  on  the  way  to  become  a  department  store.     So  far 

as  known,  all  of  the  chains  in  this  fine  started  as  retail  stores. 

Druggists,  being  professional  practitioners,  have  not  always  been 

the  most  progressive  of  business  men,  and  it  is  notorious  that 

many  drug  stores  are  practically  owned  by  drug  jobbers,  which 

partakes  of  consolidation,  too.    Retail  co-operation  has  taken 

place  on  the  largest  scale,  quite  outdistancing  corporate  chains, 

though  it  is,  of  course,  of  a  looser  description.     But  the  drug 

field  IS  destined  in  all  Ukelihood  to  see  the  most  powerful  chain 

m  America  and  ultimately  the  world. 


THE  CHAIN  STORE 


U5 


The  more  important  of  the  200  drug  chains,  with  the  number 
of  their  stores,  follow: 

IirPOBTANT  DRtTG  CHAIKB 

Stores 

Riker-Hegeman  Corporation,  New  York 105 

Louis  K.  Liggett  Co.,  Boston,  Mass 5ft 

Owl  Drug  Company,  San  Francisco 20 

Square  Drug  Co.,  Syracuse,  N.  Y £0 

Marshall  Drug  Company,  Cleveland 15 

Sun  Drug  Co.,  Los  Angeles IS 

Day  Drug  Co.,  Akron,  O l£ 

Jacob's  Pharmacy  Co.,  Atlanta,  Ga 11 

M.  C.  Dow,  Cincinnati,  O H 

Standard  Drug  Co.,  Cleveland,  0 11 

Hook  Drug  Co.,  Indianapolis 10 

May  Drug  Co.,  Pittsburgh 0 

Detroit  Drug  Co.,  Detroit,  Mich g 

Public  Drug  Co.,  Chicago g 

E.  C.  Osborn,  New  York g 

Kradwell  Drug  Co.,  Racine,  Wis 7 

Shumate's  Pharmacy,  San  Francisco 7 

Bentson  Drug  Co.,  Fargo,  N.  D 7 

Scholtz  Drug  Co.,  Denver,  Colo 6 

T.  P.  Taylor  &  Co.,  Inc.,  Louisville,  Ky 6 

Acme  Association,  New  Orleans,  La 6 

S.  B.  Davis,  Philadelphia 0 

J.  Fred  Gibson  &  Co.,  Providence,  R.  1 6 

Bartell  Drug  Co.,  Seattle « 

Wakelee,  San  Francisco § 

George  B.  Evans,  Philadelphia 5 

Buck  &  Raynor,  Chicago 0 

W.  B.  Hunt  Company,  Boston 5 

Standard  Drug  Co.,  Detroit 5 

United  Drug  Company  (Rexall),  Boston,  retailers'  coK)perative  manu- 
facturing and  jobbing  corporation,  about 5,000 

American  Druggists'  Syndicate,  New  York,  retailers'  co-operative  manu- 
facturing and  jobbing  corporation 16,000 

Philadelphia  Wholesale  Drug  Co.,  retailers'  co-operative  jobbing  house. .  550 


Greatest  in  importance  is  the  fast-growing  Riker-Hegeman 
chain.  This  is  the  result  of  several  amalgamations  within  a  half- 
dozen  years.  The  presence  of  John  H.  Flagler  in  the  old  Hege- 
man  CorpK)ration,  and  afterward  in  the  new  corporation,  was 
popularly  taken  as  an  indication  of  its  control  by  Standard  Oil 
interests.  The  new  concern  was  captured  last  February  by 
George  B.  Whelan  and  his  associates  in  the  United  Cigar  Stores 
Company,  who  are,  of  course,  closely  allied,  though  perhaps  not 


I 


S46 


THE  CHAIN  STORE 


i 


fonnally,  with  leading  tobacco  magnates.  The  new  company 
has  speeded  up  its  career  of  expansion  and  aims  to  cover  the 
country,  toward  which  ambitious  project  its  present  105  stores 
are  no  mean  beginning.  Its  capitaHzation  is  $15,000,000;  its 
sales  last  year  equal  to  the  same  amount,  and  the  dividend  on  it 
15  per  cent.  Attempts  were  made  two  or  three  years  ago  by  the 
corporation  to  acquire  control  of  the  L.  K.  Liggett  Company, 
and  the  report  is  renewed  from  time  to  time  that  it  is  still  seeking 
to  do  so.  The  Liggett  Company's  1913  business  was  about 
$6,000,000. 

All  of  the  chains  are  pronounced  price-cutters,  all  push  their 
private  brands,  all  are  manufacturers  as  well  as  retailers.  The 
two  co-operative  chains  have  advertised  nationally,  and  both 
Riker-Hegeman  and  Liggett 's  are  local  advertisers. 

There  is  no  question  that  Riker-Hegeman  will  become  a 
national  advertiser  of  its  own  brands  as  soon  as  it  secures  repre- 
May  Be-  sentation  in  a  fair  number  of  communities  throughout 
come  Na-  the  country.  This  may  be  sooner  than  some  suspect. 
^onol  The  spread  of  the  stores,  though  limited  chiefly  by 
Advertiser  ^^^  number  of  trained  managers  in  hand,  is  neverthe- 
less proceeding  at  the  rate  of  three  or  more  a  month. 

But  it  is  more  than  possible  that  with  so  good  a  start  the  com- 
pany will  not  trust  alone  to  the  relatively  slow  growth  of  normal 
expansion,  but  will  sooner  or  later  take  up  the  special-agency 
plan  and  get  representation  for  its  brands  in  every  community, 
just  as  the  United  Cigar  Stores  Company  is  doing.  National 
advertising  would  then  conceivably  follow.  This  would  not 
only  be  logical,  but  it  would  be  almost  inevitable  if  the  chain 
stores  should,  for  any  reason,  legislative,  judicial,  or  otherwise, 
lose  the  advantage  of  the  "inside  price." 

Something  has  already  been  said  about  the  Owl  Drug  Com- 
pany, of  San  Francisco,  and  its  progressive  pohcies.  It  did  a 
gross  business  of  some  $4,500,000  last  year  on  its  capitaUzation 
of  $6,500,000. 

The  Rexall  and  A.  D.  S.  stores  are  strict  co-operatives  and  are 
not  centrally  directed,  as  is  the  case  with  the  chains  proper.  Yet 
with  the  former  and  possibly  with  the  latter  there  is  a  great  deal 
of  co-operative  feeling.  Both  systems  entered  the  national  ad- 
vertising field  last  year,  the  first  of  the  chains  in  any  field  to  do 
so  on  a  large  scale.  The  A.  D.  S.  ran  three  or  four  months  at 
the  time,  but  the  Rexall  stores  have  continued  in  a  seasonal  way. 
Their  first  national  appropriation  was  $90,000. 


THE  CIUIN  STORE 


S47 


TTie  United  Drug  or  Rexall  system  was  earlier  in  the  field, 
having  started  in  1903  with  some  forty  stockholding  stores.  It 
The  United  \^^  ^^^'^<>  ^^^  first  year,  $78,000  the  second,  but  the 

Drug      ^^^^.  y^^^  turned  the  corner.     Its  gross  business  last 

System  y^ar  is  said  to  have  been  about  $5,000,000,  and  its  net 
profits  some  15  per  cent,  of  that.  It  was  started  by 
Louis  K.  Liggett,  whose  Liggett  chain  is  affiliated  with  it.  The 
United  Drug  Company  has  gone  extensively  into  manufacturing, 
and  owns  the  National  Cigar  Stands,  the  Guth  Confectionery 
Company,  Liggett  Candy  Company,  Daggett  Candy  Company, 
and  other  companies. 

The  American  Druggists*  Syndicate  was  started  in  1905  by 
Charles  H.  Goddard  for  the  avowed  purpose  of  combining  the 
retail  druggists  in  order  to  manufacture  a  few  non-secret  prepara- 
tions to  take  the  place  of  the  cut-rate  patents,  on  which  there  was 
little  or  no  profit.  It  has  built  up  a  large  business,  sales  last 
year  aggregating  $4,000,000,  and  has  a  large  manufacturing 
plant  in  Long  Island  City,  N.  Y.  It  is  building  on  the  Pacific 
Coast. 

The  two  systems  differ.  The  Rexall  stores  are  exclusive 
agencies  for  the  Rexall  preparations,  the  National  Cigar  stands, 
the  Guth  chocolates,  etc.,  and  the  agencies  are  much  valued  and 
sought  after  by  retail  druggists. 

The  A.  D.  S.,  on  the  other  hand,  has  since  last  year  sold  to 
anybody,  and  has  consequently  become  a  general  jobber.  Pre- 
vious to  last  year  it  sold  only  to  its  18,000  members,  but  not  on 
an  exclusive-agency  plan;  any  druggist  who  bought  stock  in  the 
Syndicate  could  buy  goods. 

The  pioneer  retailers'  drug  corporation  in  the  country  appears 
to  have  been  the  Philadelphia  Wholesale  Drug  Company,  which 
was  organized  in  1888  with  seven  stores  and  now  has  550  for 
whom  It  is  buying  $1,100,000  worth  of  merchandise  annually. 
The  cost  of  running  the  business  is  stated  to  be  about  6  per 
cent.,  and  the  saving  to  the  stockholders  12  per  cent.  "We 
naturally  believe  in  co-operation,**  says  President  F.  R.  Rohr- 
man,  "and  have  demonstrated  to  the  drug  trade  that  this  is  the 
only  system  which  enables  the  smaller  dealer  to  compete  with 
the  larger  one.** 

The  In  the  retail  tobacco  field  there  are  probably  250  or 

Cigar-store  300  chains,  with  a  total  of  2,500  stores,  of  which  the 
Lfunns    following  chains  are  the  more  important: 


I'! 


■I 


248  THE  CHAIN  STORE 

Stores 

TJnited  Cigar  Stores  Company,  New  York,  over 1.000 

Joseph  T.  Snyder,  Buffalo.  N .  Y 20 

M.  A.  Gunst  &  Co..  Inc..  New  York 30 

A.  Schulte,  New  York 38 

Edwin  Cigar  Co.,  New  York 35 

Best  &  Russell  Co.,  Chicago.  Ill «« 

John  J.  Dolan,  Chicago,  111 15 

Harry  W.  Watson,  Detroit,  Mich !♦ 

J.  S.  Pinkussohn,  Savannah,  Ga 14 

Albert  Breitung,  Chicago 10 

H.  M.  Scherraerhom,  Inc.,  Chicago 1* 

Wm.  A.  Stickney  Cigar  Stores,  St.  Louis • 

Zibort  Bros.,  Nashville.  Tenn » 

The  United  Cigar  Stores'  story  is  so  well  known,  has  been 
given  at  so  great  length  in  Printers'  Ink,  and  will  be  so  often  re- 
ferred to  for  comparison  in  subsequent  articles,  that  it  is  un- 
necessary to  say  much  more  here.  The  company  does  not  ad- 
vertise regularly,  but  occasionally  uses  the  local  mediums  in  a 
large  way,  particularly  in  introducing  itself  to  a  new  community 
or  in  smoothing  over  local  hostility. 

Most  of  the  other  chains  follow  their  methods  so  far  as  they  can. 

The  5c,  10c,  and  25c  variety  field  has  been  a  tempting  one  to 

5,  10,  25  chain  promoters.    Thereareprobably  about  180  chains 

Cent-ltore  of  from  three  stores  upward,  having  perhaps  2,000 

Chain     gtores  in  all.     The  more  important  follow: 

Stores 

F.  W.  Woolworth  Company,  New  York 774 

S.  H.  Kress  Company,  New  York,  and  S.  H.  Kress  &  Co..  Texas 147 

S.  S.  Kresge  Company,  Detroit,  Mich 1*4 

J.  G.  McCrorv  Company,  New  York H* 

G.  C.  Murphy  Co..  McKeesport.  Pa «« 

George  Kraft  Co..  Chicago  111 20 

Independent  5-lOc  Co.,  New  York  City 10 

Mistrot  Bros.,  Galveston,  Tex 17 

Home  Stores  Co.,  Milwaukee.  Wis 1* 

Morris  Co.,  Bluffton,  Ind 1* 

American  Five  &  Ten  Cent  Stores.  New  York 1« 

S.  Uberall,  Brooklyn,  N.  Y 10 

D.  C.  Hartzell  &  Co.,  Tippecanoe  City.  Ohio 10 

C.  A.  Kessler,  St.  Joseph.  Mo 0 

Grand  Five  &  Ten  Cent  Co.,  Pittsburgh.  Pa 8 

Trick  Bros.,  Benton  Harbor,  Mich * 

McClure  Ten  Cent  Co.,  Atlanta.  Ga 7 

Lee  Wolf  &  Bro.,  Dayton.  0 7 

Index  Notion  Co.,  Shelbyville,  Ind 7 

Banks  Bros.,  Chambersburg.  Pa 7 

J.  W.  Tottle.  Baltimore,  Md 5 


THE  CHAIN  STORE  249 

The  big  four  are  Woolworth,  Kresge,  Kress,  and  McCrory. 
All  the  other  stores  follow  them  in  general.  They  do  not 
advertise  in  local  mediums,  but  instead  "advertise  by  their 
prices."  Advertised  goods  are  rarely  handled.  In  some  lines 
they  have  their  own  private  brands.     Their  buying  is  close. 

Forty-six  of  the  Woolworth  stores  are  in  Canada  and  40  in 
England.  The  country  really  controls  seven  different  combina- 
tions. Sales  in  1913  were  $66,220,000  and  earnings  on  common 
stock  10.82  per  cent. 

The  Kresge  Company  did  a  business  of  $13,258,227  last  year 
and  earned  14.67  per  cent,  for  its  common  stock. 
Restaurant      Probably  there  are  100  restaurantchains,  with  a  total 

Chains    of  1,400  stores,  of  which  the  larger  chains  are  these: 

Restaurants 

Baltimore  Dairy  Lunch.  New  York 140 

Childs  Co..  New  York 81 

John  R.  Thompson  Co..  Chicago 7S 

Waldorf  Lunch.  Boston.  Mass 55 

Fred  Harvey,  Topeka.  Kan 55 

Horn  &  Hardart  (Automat),  New  York 27 

Exchange  BuflFet,  New  York 24 

Capitol  Lunch,  New  York 20 

Hartford  Lunch  Co..  New  York 16 

Physical  Culture  Restaurant  Co..  New  York 16 

Hanover  Limch,  Inc.,  New  York 14 

G.  W.  Armstrong  Dining  Room  &  News  Co 12 

White  Lunch  Co.,  San  Francisco 10 

New  York  Diet  Kitchen  Association,  New  York 10 

Bristol's  Dining  Room,  New  York 8 

Belmore  Lunch.  New  York 7 

Crescent  City  Lunch  Room 6 

Shanley's.  New  York , 4 

Foerster  Lansten  Co.  (Kaiserhof  Cafes)  San  Francisco S 


P 


Childs'  Restaurants,  Fred  Harvey's,  Thompson's,  Baltimore 
Dairy  Lunch,  and  Automat  are  the  best  known.  Childs'  is 
represented  in  several  States.  It  has  a  capital  of  $9,000,000  and 
pays  10  per  cent,  on  the  common  and  7  per  cent,  on  the  preferred. 
It  has  been  said  to  have  Standard  Oil  support.  The  company 
controls  several  subsidiary  companies,  one  of  which  looks  out 
for  locations  and  handles  the  real  estate.  The  other  chains  are 
supposed  to  be  profitable  services.  The  Automat,  which  is  a 
novel  nickel-in-the-slot  restaurant,  is  one  of  the  latest  comers, 
with  an  expensive  equipment  but  probably  low  running  cost. 
B^des  restaurants  and  lunch-rooms,  Fred  Harvey  al^o  rwom  the 


M 


250 


THE  CHAIN  STORE 


dining-car  service  on  the  Santa  Fe  system  and  conducts  several 
hotels. 

It  would,  as  previously  said,  be  deceptive  to  print  a  list  of 

department-store  chains  without  qualifying  it  by  the  statement 

Druggists  *^*^  ^^  ^^^^  ^^^^*  with  units  which  themselves  contain 

and      many  separate  businesses  in  departments,  and  local 

DejpaH-    conditions  always  differing  and  frequently  changing, 

IP    sJ^     ^^  would  be  impossible  to  apply  what  may  roughly  be 

called  and  understood  as  chain-store  principles,  as  a 

whole.    Nevertheless,  there  is  a  single  ownership  and  to  some 

extent  control,  and  we  cannot  ignore  the  field.    There  are  more 

than  SO  such  drygoods  and  department-store  chains,  owning 

about  250  stores.    The  leading  ones  are: 

J.  C.  Penney  Co.,  Inc.,  New  York  (formerly  Golden  Rule  Stores) 71 

H.  B.  Claflin  Co.,  New  York fg 

Eastern  Outfitting  Co.,  San  Francisco,  Cal 15 

Goodnow-Pearson  &  Co.,  Gardner,  Mass is 

C.  C.  Anderson  &  Co.,  Boise,  Ida.  (one  of  Golden  Rule  Syndicates) 0 

Clarke  Brothers,  Pennsylvania g 

Graham-Sykes  Co.,  El  Paso,  Tex . ^ 

Weiler  Syndicate.  Hartford  City,  Ind ] . ' '  7 

Oppenheim,  Collins  &  Co.,  New  York 0 

Consolidated  Drygoods  Co .'. . . .  5 

G.  Newman.  Jr.,  Chicago 5 

May  Department  Stores  Co.,  New  York 5 

A.  Steiger  &  Co.,  Holyoke,  Mass 6 

United  Drygoods  Companies.  New  York , ,,  5 

Crawford-Plummer  Co.,  Boston .      .    *  4 

Fowler,  Dick  &  Walker,  Binghamton,  N.  Y ...l.............  4 

Associated  Merchants'  Company,  New  York 4 

Dives,  Pomeroy  &  Stewart,  Reading,  Pa ,,,,  4 

Gimbel  Brothers .'..[.]  8 

The  men's  clothing  field  has  been  referred  to.    What  was  said 
Men's     of  the  department  stores  is  true  of  this,  in  less  measure. 
%^i"?    There  are  probably  45  or  50  chains,  with  600  stores,  of 
which  the  leading  ones  are: 


Chains 


Scotch  Woolen  Mills,  Davenport,  la 117 

Gateley's  Credit  Clothing  Co.,  St.  Louis '.'.'.'.'/.*.*.'  115 

Menter  Co.,  Rochester,  N.  Y.  (chain  of  credit  clothing  stores) '.'.'..'..'  81 

E.  F.  Bailey  (Glasgow  TaUors),  Des  Moines.. ',  80 

Besse  System ^ 

Browning.  King  &  Co.,  New  York 17 

Ldvy  &  Nathan,  Inc.,  New  York It 


THE  CHAIN  STORE  251 

Stores 

Ritchie  &  Cornell,  New  York H 

Scotch  Woolen  Mills,  Springfield,  HI 10 

Raab  Bros.,  Cincinnati   10 

Hilton  Co.,  New  York 8 

George  Tailor  Parlors,  New  York 7 

Kennedy  Co.,  Boston 7 

Benoit  System,  Maiden,  Mass 7 

Capper  &  Capper,  Chicago * 

BrUl  Brothers,  New  York 5 

Surprise  Stores,  New  York 5 

Plymouth  Clothing  Co.,  St.  Joseph,  Mo 4 

Rogers-Peet  Co.,  New  York 8 

Browning,  King  &  Co.  are  well  enough  known.  They  are  a 
large  and  successful  corporation.  The  "woolen  mill  company" 
movement  deserves  particular  notice.  These  are  small  clothing 
sp>ecialty  shops  organized  into  chains.  No  figures  as  to  the 
amount  of  their  business  are  obtainable. 

Manufacturers'  agencies  under  one  form  or  another  play,  of 
course,  a  large  part  in  this  field. 

The  men's  furnishing  field  is  being  similarly  organized,  though 

the  large  cities  are  the  only  ones  to  show  large  chains.    There 

may  be  25  in  the  coimtry,  with  a  total  of  90  stores. 

Mens     Weber  &  Heilbroner,  of  New  York,  is  the  only  one  to 

^Tidd^^  go  into  two  figures,  having  11  stores.    In  New  York, 

Liberman  Brothers  and  Pinto  Brothers  have  four  each, 

and  in  Chicago,  Albert  Hoefeld  and  Washington  Shirt  Company 

four  each. 

In  the  piano  field  some  manufacturers  maintain  warerooms 
and  branch  stores  in  several  cities  and  agencies  in  others,  while 
other  manufacturers  have  agencies  only,  some  of  these 
^M^'  ^fd^  agencies  being  under  one  management.    There  is  a 
Interests    system  of  consigning  instruments  by  both  manufac- 
turers and  dealers,  and  many  houses  regard  these 
consignment  accounts  with  dealers  as  creating  branch  stores. 
However,  it  may  be  said  there  are  60  chains  exclusive  of  branch 
stores,  agencies,  and  consignment  deals,  with  perhaps  450  stores, 
the  leading  chains  being  as  follows: 

Stores 

Starr  Piano  Co.,  Richmond,  Ind 36 

Grinnell  Bros.,  Detroit   24 

F.  W.  Frederick  Piano  Co.,  Uniontown,  Pa 23 

Eilers  Music  Co.,  Portland,  Ore 20 


THE  CHAIN  STORE 


Stores 

M.  Steinert  &  Sons  Co.,  Boston 18 

Wiley  B.  Allen  Co.,  San  Francisco 18 

W.  W.  Kimball  Co.,  Chicago 17 

Chas.  M.  Stieff  Co.,  Baltimore 16 

Story  &  Clark  Piano  Co.,  Chicago 15 

Isaac  Bledsoe,  Austin,  Tex 12 

F.  G.  Smith,  New  York 1« 

A.  L.  Bailey,  St.  Johnsbiiry,  \i 12 

Sherman  Clay  &  Co.,  San  Francisco 11 

J.  W.  Jenkins'  Sons  Music  Co.,  Kansas  City 11 

Conway  Co.  (Hallct  &  Davis),  Boston ID 

Field-Lippman  Piano  Stores,  St.  Louis 1) 

Cable  Co.,  Chicago t) 

M.  H.  Stranburg,  Jamestown,  N.  Y 9 

Rudolph  Wurlitzer  Co.,  Cincinnati 8 

Steinway  &  Sons,  New  York 8 

F.  A.  North  Company,  Philadelphia 8 

Baldwin  Piano  Co.,  Cincinnati 8 

A.  B.  Smith,  Akron,  0 7 

Cluett  &  Sons,  Troy,  N.  Y 6 

Jacob  Doll  &  Sons,  New  York   6 

Otto  Wissner,  Brooklyn,  N.  Y 6 

Ludden  &  Bates,  Savannah,  Ga 8 

-Aeolian  Co.,  New  York,  5  stores  in  U.  S.,  5  in  foreign  countries 

Musical  Instrument  Sales  Co.,  New  York.  9  departments 

*Completing  the  necessary  census  of  the  chains  before  passing 
on  to  the  more  interesting  and  important  matter  of  examining 
their  methods,  we  present  further  evidences  of  the  concentration 
of  ownership  and  centraUzation  of  management  that  is  rapidly 
proceeding  in  the  retail  field.  Most  of  it  is  the  work  of  the  last 
fifteen  years.  The  bulk  of  the  2,000,  with  their  25,000  stores, 
have  had  their  beginnings  or  chief  growth  in  that  time.  And  by 
chains,  we  repeat,  is  meant  organizations  of  retail  stores  own«d 
and  managed  as  a  unit.  Other  manifestations  of  concentration, 
though  of  scarcely  less  significance,  like  retailers'  co-operative 
buying  exchanges  and  incorporated  jobbers  and  manufacturing 
companies,  have  been  noted,  but  are  not  included  in  the  figures. 

The  boot  and  shoe  field  has  perhaps  50  chains,  with  700  stores, 
the  more  important  chains  being: 

Stores 

R.  H.  Long  (Waldorf),  Framingham,  Mass 82 

W.  L.  Douglas  Shoe  Co.,  Brockton,  Mass 79 

Regal  Shoe  Co.,  Boston 47 

Hanover  Shoe  Co.,  New  York 52 


*PnrUers'  Ink\  October  22.  1914,  p.  60. 


THE  CHAIN  STORE 


253 


Florsheim  Shoe  Co.,  Chicago go 

Sorosis  Shoe  Co.,  Brooklyn go 

Hanan  &  Son,  New  York jg 

Beck  Shoe  Co.,  New  York 15 

E.  W.  Burt  &  Co.,  East  Lynn,  Mass '.'.'.'.'.'.'.'.  12 

S.  B.  Thing  Co.,  Inc.,  Boston ig 

C.  H.  Baker  Shoe  Co.,  San  Francisco n 

Walkover  Shoe  Co.  (George  E,  Keith  Co.),  Brockton,  Mass .    .  1 1 

French,  Shriner  &  Umer,  New  York n 

L  Blyn  &  Sons,  New  York n 

Emerson  Shoe  Co.,  New  York |o 

John  Ward  Co.,  New  York g 

Rival  Shoe  Co.,  New  York g 

Stetson  Shoe  Company 7 

O'Connor  &  Goldberg,  Chicago ...........:..  ^  ... .  6 

The  largest  chains,  as  will  be  recognized,  are  manufacturing 
chains— Regal,  Douglas,  Hanan,  etc.     The  Regal  has,  besides, 
1,500  agencies;  Walkover  3,500  agencies,  etc. 
Cmfedim-     The  confectionery  field  has  perhaps  40  chains,  with 
ery  Chains  $15  stores,  of  which  there  are  best  known: 


Huylcr's,  New  York 52 

Gates,  Philadelphia ^2 

Page  &  Shaw,  Boston 14 

Loft,  New  York ,  ]    .  12 

Mirror,  New  York 12 

Schraflft's,  New  York 8 

Martha  Washington  Candy  Co.,  Washington,  D.  C.  7 

F.  G.  Shattuck  Co.,  New  York '.'.'.'.'.'.'.'.'.'.  6 

Robert  H.  Putnam  Candy  Co.,  Cincinnati  ...  5 

Mary  Elizabeth  Candy  Co.,  New  York & 

Chas.  W.  MiUcr,  Philadelphia '....'.....'.'.".'."..".'.  5 

Repetti,  New  York 4 

French  Nougat  Candy  Co.,  Cincumati 4 


There  are  about  25  bakery  chains,  with  125  stores.     .     .     . 

Jewelry  Fifty  chains,  with  a  total  of  200  stores,  is  probably  a 
fi^     conservative  estimate  for  the  jewelry  field.     .     .     . 

There  are  two  recent  developments  m  this  field  that  are  in- 
teresting. The  first  is  the  organization  of  a  co-operative  sjTidi- 
cate  of  jewelers  on  the  lines  of  the  United  Drug  Company,  the 
organization  of  Rexall  stores.  Louis  K.  Liggett,  the  president  of 
the  United  Drug  Company,  is,  in  fact,  chairman  of  the  board  of 


£64 


THE  CHAIN  STORE 


directors  of  the  United  Jewelers,  Inc.,  though  the  connection  is 
declared  to  be  purely  personal  and  not  to  indicate  any  rajyproche- 
ment  between  the  two  organizations.  Neither  of  the  corporations 
is  a  chain  in  the  restricted  sense  we  are  giving  it — they  do  not 
own  and  direct  the  constituent  stores.  But  the  United  Drug 
Company  is  powerful  in  its  field,  and  is  growing  increasingly  so, 
and  the  United  Jewelers,  Inc.,  will  no  doubt  aim  at  the  same 
thing  in  its  own  domain.  IVIr.  Liggett 's  experience  will  be  valu- 
able to  it. 

The  United  Jewelers'  plan  is  to  invite  2,000  of  the  22,000 
jewelers  in  the  country  into  the  organization,  the  "upper  ten" 
per  cent.,  if  it  can  get  them,  and  it  probably  will,  judging  from 
the  eagerness  with  which  Rexall  agencies  were  sought.  These 
jewehy  agencies  become  stockholders  in  the  organization;  will 
handle  exclusively  the  organization  brand  of  "Hallmark"  goods, 
and  will  be  known  as  "Hallmark"  stores.  The  company  says 
in  its  trade-paper  advertisement: 

"The  United  Jewelers,  Inc.,  is  not  a  buying  syndicate  to  make 
price-cutting  and  underselling  possible.  On  the  contrary,  it  is 
a  bulwark  of  price  and  quality  and  a  protection  alike  to  the 
high-grade  manufacturer,  the  reputable  jeweler,  and  the  appre- 
ciative, liberal-minded  purchasing  public." 

The  electro  book  for  local  advertising  shows  a  line  of  Hall- 
mark  silverware,    bracelet   watches,    gold-filled   jewelry,    link 
Evetitually  buttons  and  tie-clips,  candlesticks,  jam-jars,   silver 
NaHonal  picture-frames,    hat-pins,    scarf-pins,   etc.     Window- 
AdveHvnng  trimming  helps  are  being  devised  and  national  adver- 
tising at  a  future  date  is  promised. 

The  other  development  is  the  extension  of  the  Brodegaard 
plan  and  the  incorporation  of  the  wholesale  business  with  a 
capital  of  $200,000.  The  Fred  Brodegaard  Jewelry  Company. 
of  Omaha,  has  been  consigning  goods  to  some  50  small-town 
merchants  in  Nebraska  and  western  Iowa.  The  goods  are 
placed  out  on  a  percentage  basis,  the  company  retaining  title, 
and  the  merchant  furnishes  the  showcase. 

Brodegaard  salesmen  make  each  town  every  sixty  days,  con- 
duct special  and  well-advertised  sales,  display  more  extension 
stock  from  their  trunks.  The  company  plans  to  take  in  250 
more  merchants.  It  is  not,  strictly  speaking,  a  chain  in  the 
sense  we  are  using  the  word. 

Co-operative  buying  exchanges  or  associations  are  common  in 
the  jewehy  line,  but  not  conspicuously  successful.    Some  of  these 


THE  CHAIN  STORE  St^5 

are  not  recognized  by  manufacturers  or  some  manufacturers. 
The  Jewelers'  Co-operative  Syndicate  is  probably  the  most 
prominent  of  the  combines. 

In  the  oil  and  gasoline  field,  the  Texas  Company  and  some 
others  maintain  retail  and  wholesale  branches  or  service  stations 
in  great  numbers  in  different  sections  of  the  United 
Gasdine    States,  and  even  in  coast  harbors  on  floats  or  island 
for  the  convenience  of  power  boats.     The  Standard 
Oil  service  stations  in  New  York  and  New  York  State,  for  in- 
stance, number  over  600.     There  are  probably  four  or  five  such 
groups,  with  2,000  stations  in  all. 
Chaijis  in      The  larger  chains  in  the  hat  field,  where  there  are 
Hat  Field  perhaps  25,  with  250  stores,  are  these: 

Stores 

Kaufman  Bros.,  New  York 40 

Truly  Warner,  New  York 24 

Irving  Hats  Co.,  New  York 24 

SarnofiF  Bros.,  New  York 16 

Reilly  Hat  Store,  Springfield,  Mass 10 

Young's  Hat  Co.,  New  York 10 

Knox,  New  York 3 

The  history  of  the  hat  chains  is  that  they  came  in  and  re- 
established specialty  stores  after  the  department  stores  had 
practically  wiped  out  the  little  individual  hat  store.  Young's 
and  Knox  have  each  1,000  agencies. 

In  the  larger  centres,  particularly  the  metropolis,  laundry 
chains  have  been  developed.    There  are  23  in  New  York,  three 
Laundries  ^^  Chicago,  and  three  in  Philadelphia — ^probably  not 
more  than  45  altogether  in  the  country,  combining 
possibly  275  stores.    The  best  known  in  New  York  are  Wallach*s, 
22   stores,   a  consistent   advertiser;   Stancourt,   15;   Carolyn- 
Heath,  23,  and  Champion,  17.     Munger  in  Chicago  and  the 
Nonpareil  in  Philadelphia  have  eight  each. 
Butchers       Scvcnty-five  chains  of  butchers,  with  a  total  of  450 
stores,  is  probably  conservative.     The  largest  are 
these: 

Stores 

L.  Oppenheimer,  New  York 33 

Washington  Market,  New  York 16 

A.  Andre,  New  York 15 

Schuck  &  Co.,  New  York 12 

Star  Beef  &  Provision  Co.,  New  York 11 

Rittenhouse  Bros.,  Philadelphia 8 

E.  Kahn's  Sons  Co.,  Cincinnati 7 


256 


THE  CHAIN  STORE 


Froscb  &  Sons.  Philadelphia ^"^"^^f 

C  olumbia  Meat  Market,  Philadelphia  « 

Chas.  W.  Spencer,  PhiUdelphia „ 

Becker  Bros.  Co.,  Cincinnati '.'.'.'.'.'.'.'.'.'.'.'/.','.'.'.]'.".""        q 

111  the  dyeing  and  cleaning  field  there  are  some  45  chains,  of 
which  2o  are  m  New  York  and  10  in  Chicago.     Probably  there 

Ihrina    f  ^.  1^  stores     Many  of  the  chains  advertise.     The 
and      ^f  t  known  m  New  York  are :  Barrett,  Nephews  &  Co.. 

Cleaning  35  stores;  Paul  L.  Bryant,  8  stores;  Mnie.  Frances 
nr^^T^"^'  ^^  Stores;  Eastern  District  Dye  Works,  n 
stores;  Mme  Obry,  12  stores;  Rees  k  Rees,  14  stores;  Schwartz 
&  I^orger,  14  stores;  Metropolitan  Dye  Works,  12  stores;  and 
l^ewando  Boston,  30  stores;  in  Chicago,  Kraus  Bros.,  Lowev 
r!;i  I  iv'i  ^jj'^^^^^ning  &  Dyeing  System,  Chicago,  20; 
Becker  &  Wade  Co.,  Chicago,  15;  Superb  Dyeing  and  Cleaning 
\\orks  Chicago,  14  stores;  Consolidated  Cleaning  Co.,  10  stores- 
m  bt.  Louis,  Lungstras  Dyeing  &  Cleaning  Co.,  17  stores,  and  in 

F^^flTn    ^w^"  ^^^iS'??^"^  ^  ^y^''^  C<>»  23  stores; 
J^ooter  s  Dye  Works,  Philadelphia,  13. 

The  consolidation  in  the  dairy  field  shows  nearly  40  chains 

Jn  Dairy  totallmg    possibly    550    stores.      The    leading    ones 
rteid     ar^.  ° 

Sheffield  Farms-Slawson-Decker  Co..  New  York. . .  at 

Borden  Condensed  Milk  Co..  New  York. .  ?i 

N.  C.  Nelson,  New  Orleans.  La LL 

H.  P.  Hood  &  Sons,  Boston ll 

Clover  Farm  Dairy.  New  York Zi 

Model  Creamery,  Boston * f? 

Abbott's  Aldemey  Dairies,  Philadelphia.' it 

Locust  Farm  Co.,  New  York  il 

McDermott  Dairy  Co.,  New  York '.'.'•'.'.'.'.'.'.'.'.'.'.'.'.'.'.'.'.'.'.'.'..'.'.'"  7 

baWk!^^  Bros.-Bauer  Co.,  of  Cincinnati,  are  included  under 

Borden's  dairy  stores  furnish  an  outlet,  of  course,  for  the  Bor- 
den products,  besides  milk. 

Saloons  considering  their  number,  do  not  happen  to  have  been 
very  greaUy  consolidated  in  retail  ownership.    Most  saloons  are 

Saloo?is  controlled  by  one  brewery  or  another,  which  often  ad- 
vances the  money  or  part  of  the  money  to  buy  the  li- 
cense.    However,  there  are  some  chains,  32  of  them  in  New  York 


THE  CHAIN  STORE 


257 


indicating  that  there  are  probably  at  least  100  in  the  country 

with  an  average  of  between  four  and  five  stores  each.    .    .    . 

There  are  probably  25  wine-and-liquor-store  chains,  control- 

Liguor-    ling  140  stores,  the  best  known  being  the  Wine  Grow- 

stare      ers'  Association  of  New  York,  which  has  53  stores,  and 

the  Hygrade  Wine  Company,  of  the  same  city,  18 


Chains 
stores. 

i  Furniture 
Field 


The  furniture  fields  show  probably  about  16  chains, 
with  100  stores,  among  them  these: 


II 


it 


Stores 

Gateley's.  Chicago  (and  clothing) 26 

Spiegel,  May,  Stem  Co.,  Chicago 18 

General  Furniture  Co.  Chicago 7 

Royal  Furniture  &  Carpet  Co.,  Chicago 4 

Phillips  Bros.  &  WeU,  Chicago 3 

N.  J.  Sandberg  Co.,  Chicago 3 


One  of  these  houses  writes  Printers*  Ink:  "There  are  a  number 
of  stores  located  in  smaller  towns  which  are  really  included 
in  our  syndicate,  but  we  do  not  advertise  them  or  publish  them 
as  being  members  of  our  syndicate  because  they  are  in  competi- 
tion with  the  company." 
There  are  easily  25  chains,  with  150  stores,  in  the  women's 
Chaki,    cloaks,   suits,  etc.,  field,  among  them  the   follow- 
Suiu,  etc.  ing: 

Stores 

Arthur  L.  Braus.  New  York 19 

Samuel  Lewis,  Troy,  N.  Y , .  14 

P.  &  Q.  Shop,  New  York 10 

Bedell  &  Co.,  New  York 6 

Klein  Cloak  Co.,  New  York 5 

The  Leiser  Co.,  Chicago 4 

AVamer  Company,  Warren,  0 4 

United  Cloak  &  Suit  Co.,  Milwaukee 4 

Conrad-Baish-Croehle  Furniture  Co.»  Cleveland 4 


We  cannot  overlook  the  coal  business,  which,  like  other 

lines,  is  experiencing  concentration.     Many  concerns  now  have 

Chains  of  yards  in  different  parts  of  their  home  city  and  main- 

Coal  Stores  tain  branch  oflSces  at  them.     We  have  28  chains  listed, 

having  three  or   more  branches — there   are  probably  40 


in 


I 


.  I 


I 


258  THE  CHAIN  STORE 

the  countiy,  with  about  500  stores,  the  best-known  chains 
being: 

Consumers'  Co..  Chicago ^^^^ 

Chalf ant  Brothers,  Philadelphia .*.'.'.*.*.'.'.".' gA 

Colorado  Supply  Co.,  Denver q» 

Polar  Wave  Ice  &  Fuel  Co.,  St  Louis '.'.'. ZL 

Bums  Brothers,  New  York f « 

Curtis  &  Blaisdell  Co..  New  York ''  i  1  ^ ".!!".!!!'.!".  1 !  ;*.*.".'.'.;  1 1  ".■.'.  ]        ? 

Bank  consolidation  or  extension,  as  you  please,  is  noticeable. 
Ihere  are  16  such  chains  and  branch  systems  in  New  York  and 
BanJe  Con-  probably  as  many  more  in  the  rest  of  the  country 
to/utoion*  with  125  branches  in  all.    Thelargest  chains  are: 

Cora  Exchange  Bank,  New  York Branches 

New  York  Produce  Exchange  Bank.  New  York  a 

Colonial  Bank.  New  York. .    .  .T^^  2 

Henry  Clews  &  Co.,  New  York '.".'.*.'!.'.".'.'.*.'.'.' 0 

German  Loan  &  Savings  Bank,  San  Francisco . . .  4 

The  private  banking  and  brokerage  field  shows  many  branch 
organizations.  Some  of  these  are  more  branch  offices  or  agen- 
cies than  places  where  anything  is  actually  sold. 

An  interesting  chain  is  projected  in  this  field  in  the  shape  of 
a  system  of  banks  having  for  its  object  the  prevention  of  usury 
by  lending  money  in  small  amounts  to  the  poor.  It  will  be 
capitalized  at  $5,000,000  and  is  intended  to  extend  to  every  large 
city  m  the  country.  The  prime  mover  is  Julius  Rosenwald, 
president  of  Sears,  Roebuck  &  Co.,  and  Andrew  Carnegie. 
Vmcent  Astor  and  others  are  said  to  be  interested. 

We  are  not  Ukely  to  think  of  theatres  as  chain  stores,  although. 

of  course,  they  purvey  amusement  at  retail.     Concentration 

Tkeatrwal  has  gone  to  the  extent  of  perhaps  15  chains  or  cir- 

Chains    cuits,  10  of  them  with  headquarters  in  New  York 
and  probably  not  more  than  260  theatres.     ... 

The  concentration  in  such  small  but  important  hues  as  news- 
stands, fruitstands,  shoe-blacking  stands  has  been  great  in  the 

N^3-     cities.    Any  estimate  must  be  an  exceedingly  free 

Mand,,  ek.  one  because  raih-oad.  raihoad  station,  subwav  and 

elevated  roads,  hotels,   and  pubhc  building  concessions  are 

farmed  out  to  mdividuals  or  corporations,  often  at  very  high 

rentals.     It  would  be  useless  to  seek  accurate  data  in  these  field* 


THE  CHAIN  STORE  259 

when  the  object  of  this  article  and  series  is  chiefly  to  suggest 
rather  than  record  the  progress  of  the  impulse. 
Taking  news-stands  alone,  we  select  almost  at  random: 

Stands 

Union  News  Co.,  New  York 900 

Ward  &  Gow.  New  York 125 

Inter-State  News  Co.,  New  York 38 

G.  W.  Armstrong  Dining  Room  &  News  Co.,  Boston 30 

Tyson  Company,  New  York 23 

Parker  Railway  News  Co.,  Macon,  Ga 22 

There  may  be  100,  there  may  be  200  such  chains,  with  a  total 
of  2,500  stands;  we  can  only  guess. 

Bootblack  stands  in  the  East  are  owned  chiefly  by  Italians; 
small  fruitstands  by  Greeks.  It  is  impossible  to  get  any  reliable 
figures  on  which  to  base  an  estimate.  Probably  they  do  not 
exist  outside  of  the  large  cities;  it  is  concessions  that  breed  them. 
One  hundred  chains  in  each  line,  with  an  average  of  four  stands, 
would  be  reasonable. 

Of  its  own  field,  the  Farm  Implement  News  affords  this  in- 
formation which  might  well  come  from  other  fields,  too: 
No  Farm       "There  are  no  chain  stores  in  the  implement  trade 
Implement  SO  far  as  wc  know.     There  was  a  time  when  some  of 

Chains  i]^^  jobbers  and  branch  houses  of  manufacturing 
concerns  maintained  a  few  retail  estabHshments  in  their  re- 
spective territories.  In  some  cases  this  plan  was  forced  upon 
the  wholesale  concerns  through  their  having  to  seize  certain 
stocks  to  protect  chains,  but  in  some  cases  retail  establish- 
ments were  started  in  certain  towns  because  the  wholesale  con- 
cerns could  not  obtain  representation  they  wanted  with  the 
regular  dealers. 

"Some  years  ago  this  matter  was  taken  up  by  the  National 
Federation  of  Retail  Implement  and  Vehicle  Dealers'  Asso- 
ciation which  protested  against  the  system,  with  the  result  that 
in  most  cases  the  retail  houses  were  discontinued." 

The  Hardware  Age  reports: 

"The  idea  of  chain  stores  is  growing  in  the  hardware  field. 
Hardware  and  we  presume  there  must  be  fifteen  or  twenty  con- 

Field  cerns  operating  anywhere  from  two  or  three  stores  to 
as  many  as  a  dozen.  One  of  the  most  prominent  concerns  in 
this  field  is  the  George  W.  Peck  Company,  whose  ofl&ces  are  at 
Bath,N.Y. 


mo 


THE  CHAIN  STORE 


"We  believe  the  object  of  organizing  chain  stores  is  mainly 
to  save  on  the  cost  of  goods.  The  buying  problem  is  one  that  is 
very  acute  in  the  hardware  field,  and  the  merchant  who  can  buy 
goods  at  the  lowest  price  is,  to  a  certain  extent,  able  to  com- 
mand the  trade  of  his  locality  on  some  lines  of  merchandise." 

The  George  W.  Peck  Company  operates  10  stores. 

In  the  scT^ing-machine  field  the  Singer  Sewing  Machine  Com- 
pany, Jersey  City,  N.  J.,  has  1,600  stores,  but  only  800  are  run 
direct  by  the  company,  the  balance  being  rented  by  agents  who 
work  on  commission. 

The  oflSce  and  store  appliance  fields  have  been  peculiarly 
subject  to  concentration  in  some  directions.  In  most  of  the 
cases  the  business  is  done  by  agents  who  are  paid  on  commission 
and  who  maintain  their  own  quarters.  Nevertheless,  the  con- 
nection and  control  are  very  close.     .     .     . 

Evidences  of  chains  or  concentration  in  other  fields  may  be 
sunuuarized  as  follows: 

Corwentra"      Optical:  M.  H.  Harris,  New  York,''9;J.  Ehrlich  & 

tixm      Sons,  New  York,  6;  E.  B.  Meyro\^ntz  Co.,  Inc.,  5 

,  Elsewhere  local  and  2  foreign;  M.  Singer,  New  York,  4;  B.  L. 

Becker,  N.  Y.,  3;  Dachtera  Bros.,  New  York,  3;  probably  8  to 

10  in  the  country,  with  35  or  40  stores. 

Milliner^':  Eugene  Frank,  Cincinnati,  O.,  5;  Banner  Milli- 
nery Co.,  San  Francisco,  3;  Chicago  Millinery  &  Hat  Co., 
Chicago,  3;  Mme.  Bertha,  New  York,  3;  A.  W.  Jones  Milliner>' 
Co.,  Boston,  6;  Empire  Feather  Boa  Co.,  New  York,  3;  Cawston 
Ostrich  Farm  Corp.,  South  Pasadena,  Cal.,  4  stores;  Milkman's 
Millinery  House,  New  York,  3;  perhaps  15  in  the  country. 

Gloves;  P.  Centemeri  &  Co.,  New  York,  4  stores. 

Fountain  pens:  Waterman  Fountain  Pen  Co.,  4  stores. 

Delicatessen:  Solowey  Bros.,  New  York,  3  stores;  Rosoff 
Brothers,  Brooklyn,  N.  Y.,  3  stores. 

Barber  Shops:  New  York  Barber  Co.,  8  shops;  Terminal 
Barber  Shops,  New  York,  6  shops. 

Lumber:  Boeckler  Lumber  Co.,  St  Louis,  3  yards;  Hole- 
kamp  Lumber  Co.,  St.  Louis,  4  yards;  St.  Louis  Lumber  Co.,  6 
yards;  J.  Thomas  Lumber  Co.,  Topeka,  Kan.,  20  yards;  W.  I 
Miller,  Topeka,  4  yards;  D.  Gabriel  Co.,  Topeka,  3  yards — 
perhaps  50  chains  in  the  country  with  300  yards. 

Corsets:  W.  H.  Gossard  Company,  Chicago,  3  stores;  Good- 
win, New  York,  6;  Sacks  Corset  Shop,  New  York,  3. 

Electric  Supphes:  Manhattan  Electric  Supply  Co.,  New  York, 


THE  CILVIN  STORE 


261 


6  stores;  S.  May,  New  York,  3  stores.  See,  also,  automobile 
accessories. 

Florists:  five  in  New  York;  Warendorf,  5  stores;  Fleisch- 
mann,  5;  Colonial,  3;  Christatos,  3;  Cardasis,  3;  perhaps  15 
chains  in  the  country,  with  50  stores. 

Funeral  Directors:  William  Necker,  Union  Hill,  N.  J.,  25 
branches;  William  J.  Dargeon,  Inc.,  New  York,  20  branches; 
Thomas  Burton's  Sons,  New  York,  3  branches;  Thomas  N. 
Flynn,  New  York,  3  branches;  D.  Scocozza,  New  York,  3 
l)ranches. 

Furs:  Clawson  &  Wilson,  New  York,  3  stores. 

In  the  book  field,  the  H.  B.  Claflin  Company  has  some  100 
book  departments  in  as  many  department  stores,  conducted 
under  the  name  of  the  Syndicated  Trading  Co.  The  Inter- 
national CorresfK)ndence  Schools,  Scranton,  Pa.,  has  three  of 
its  own  stores.  There  are  several  other  corresjwndence  schools 
with  offices  in  the  principal  cities. 

In  the  sporting  goods  field,  A.  G.  Spalding  &  Bro.,  of  Chicago, 
have  43  stores,  including  foreign;  Wright  &  Ditson,  of  Boston,  7, 
and  Iver  Johnson  Sporting  Goods  Company,  of  Fitchburg, 
Mass.,  3. 

Phonographs:  Columbia  Graphophone  Co.,  30  branches. 
The  Victor  Talking  Machine  Company  has  none.  The  Edison 
Phonograph  Company  is  building  its  first  retail  store  on  Fifth 
Avenue,  New  York. 

Wall  Paper:  Richard  E.  Thibaut,  Inc.,  New  York,  3  stores; 
F.  Beck  &  Co.,  New  York,  3  stores;  Robert  GrifiFen  Co.,  New 
York,  3  stores;  United  Wallpaper  Store,  Lowell,  Mass. 

Stock  feed:  Arthiu*  E.  Pratt,  Albany,  N.  Y.,  a  niunber  of 
stores  in  the  smaller  agricultiu^l  villages. 

Trunks  and  bags:  D.  A.  Doyle,  New  York,  6  stores;  Schwartz 
&  Co.,  New  York,  5  stores;  Wm.  Bals,  Inc.,  Newark,  N.  J.,  4 
stores;  Weisman  Bros.,  4  stores;  Charles  W.  Wolf,  New  York,  4 
stores;  Crouch  &  Fitzgerald,  New  York,  3  stores;  Casey  Trunk 
Co.,  3  stores;  Emergency  Baggage  &  Repair  Co.,  New  York,  3 
stores;  perhaps  15  chains  in  all  with  55  stores. 

Paper  tags,  novelties,  etc. :  Dennison  Manufacturing  Co., 
Boston,  6. 

Hotels:  United  Hotels  Company,  Niagara  Falls,  N.  Y.,  15 
hotels;  Statler  Hotel  Co.,  Buffalo,  3  hotels;  Fred  Harvey,  Ritz- 
Carlton,  New  York,  3. 

There  are  unquestionably  other  evidences  in  these  fields,  as 


292 


rwr 


THE  CHAIN  STORE 


«i 


well  as  in  others  that  have  not  been  noted.  The  chief  purpose 
in  giving  those  listed  is  to  show  in  detail  what  the  average  mind 
hardly  grasps  when  stated  as  a  generalization.  The  process  of 
centrahzation  is  significant.  It  indicates  that  business  men  are 
coming  into  a  more  thorough  mastery  of  the  principles  of  busi- 
ness and  that  standards  of  practice  are  taking  the  place  of  the 
old-time  "personality."  Where  it  took  all  the  time  of  the  pro- 
prietor to  manage  his  employees,  and  those  only  a  few,  he  now 
finds  it  possibleby  system  to  supervise  many.  And  he  is  elimi- 
nating the  wastes  that  ate  up  his  mental  capital.     .     .     . 

(2)    SOME  TYPICAL  CHAIN-STORE  METHODS 

In  the  seventh  article  these  investigators  group  under  twelve 
heads  the  main  features  of  chain-store  organization,  which 
served  as  a  basis  of  comparison  between  them  and  their  inde- 
pendent rivals  so  far  as  their  operating  efficiency  is  concerned. 
These  twelve  heads  are  as  follows : 


Financing 

Organization 

Locating  the  stores,  fitting,  etc. 

Buying 

Display  of  stock 

Pricing 


Advertising 

Selling 

Delivery 

Accounting 

Adjustments 

Super\Tsion  and  improvement 


These  various  lines  of  activity  are  traced  one  by  one  through 
the  particular  trades  in  which  chain  stores  have  become  con- 
spicuous. The  investigators  make  clear,  for  example,  the  power 
which  large  capitalization  gives  to  such  concerns  as  the  Wool- 
worth  Company,  with  $65,000,000  capital;  the  United  Cigar 
Stores  Company,  with  $35,000,000  capital;  the  United  Drug 
Company,  with  $20,000,000  capital;  the  Riker  &  Hegeman 
Company,  with  $15,000,000  capital,  and  the  Childs  Com- 
pany with  $9,000,000  cai  ital.  Among  the  twelve  groups  there 
are  two,  however,  which  deserve  particular  attention  from  the 
standpoint  of  the  advertising  man :  buying  activities,  and  selling 
operations. 

These,  of  course,  are  no  more  important  than  some  of  the 


THE  CHAIN  STORE 


263 


others.  For  example,  there  probably  is  no  single  field  in  which 
such  a  concern  as  the  United  Cigar  Stores  Company  has  se- 
cured greater  advantage  over  its  independent  competitors  than 
in  the  ability  which  it  has  displayed  to  pick  for  itself  the  best 
retail  sites.  This,  as  is  well  knovm,  has  become  one  of  the  most 
important  activities  of  the  company,  and  there  are  students  of 
the  question  who  attribute  the  United  Cigar  Stores'  success 
as  much  to  the  oj)erations  of  its  real  estate  department  as  to 
any  one  cause.  Again,  in  the  matter  of  accounting  and  in  the 
keeping  of  records,  the  chain  stores  have  a  great  advantage  over 
their  independent  rivals.  It  will  be  necessary,  however,  for  us 
to  confine  our  attention  to  the  two  heads  which  we  have  already 
mentioned.  From  the  section  of  these  articles  describing  the 
buying  activities  of  these  concerns,  we  quote  the  following: 

.    .    .    *We  are  considering  the  buying  habits  of  the  chains 

as  compared  with  those  of  the  independent  retailers  to  discover 

Is  the     which  has  the  advantage  and  whether  there  is  any- 

Buying    thing  of  unfair  competition  in  it,  as  independent  re- 

Fatrf     tailers  and  manufacturers  charge  there  is.     Most  of 

the   2,000   chains,  with  25,000  stores,   which   Printers*   Ink^s 

investigation  has  shown  existing  in  the  country,  are  retailers' 

chains,  which  handle,  as  in  the  grocery,  drug,  and  tobacco  lines, 

a  large  variety  of  goods,  including  trademarked  and  nationally 

advertised  articles.     Is  their  buying  fair — putting  aside  for  a 

minute  the  question  of  cash  discounts  at  thirty,  sixty,  or  ninety 

days? 

Take,  for  instance,  the  four  examples  given  above,  where  the 
leading  drug  chain  of  the  country  bought  cheaply  and  passed  a 
large  part  of  the  saving  on  to  the  public — is  there  anything 
basically  wrong  about  that.^  We  cannot  see  anything  wrong  in 
it,  even  though  the  independent  retailer  is  injured  by  it,  as 
much  injured,  perhaps,  as  if,  indeed,  it  were  morally  wrong. 
It  is  not  the  chain's  fault  if  independents  cannot  buy  so  cheaply 
in  this  way.  And  the  independents  generally  do  not  complain 
of  this  kind  of  quantity  buying,  but  only  of  the  "inside  price," 
the  secret  extra  discoimt  on  staples  and  standard  brands,  which 
is  another  thing  entirely.     .     .     . 

*Prinieri  Ink,  Novembcjc  19, 1914,  pp.  67-76. 


264 


THE  CHAIN  STORE 


■  t 

II 


m 

I 


i 


There  is  no  question  that  many  manufacturers  have  been 
running  after  the  chains  with  quantity-price  offers  and  "free 
deals,"  just  as  the  jobbers  were  running  after  the  retailers.  It 
reacted  on  the  jobbers  and  it  is  reacting  now,  and  will  react  more, 
on  the  manufacturers,  though  the  latter  do  not  seem  to  realize  it. 
It  seems  to  have  been  the  jobbers  that  have  the  chains  m  most 
lines  their  start.  This  was  in  the  early  days  before  there  was 
any  suggestion  of  a  "  menace."  The  jobbers,  not  looking  beyond 
the  mmute,  kept  the  discount  for  quantity  before  the  pro- 
gressive dealer's  eyes  and  helped  to  nurse  the  big  buying  along. 
The  history  of  most  chains  is,  however,  that  as  soon  as  it  paid  to 
do  so  they  threw  over  the  jobber  and  bought  direct  of  the  manu- 
facturer. It  has  not  always  worked  out  that  way.  The  West- 
em  grocery  chains,  for  example,  generally  find  tbe  jobbers  too 
strong  at  present  to  eliminate. 

The  jobbers  are  now  alive  to  the  danger,  but  are  still  short- 
sighted, or  caught  in  the  grip  of  circumstances.  They  are,  ac- 
cording to  the  testimony  of  the  chains,  "secretly  and  more  or 
less  unlawfully  combining  to  use  their  influence  on  the  manufac- 
turer to  prevent  his  selling  direct  to  chains,  even  though  they 
are^  buying  in  jobbing  quantity." 

**The  jobbers  may  deny  this  all  they  please,"  says  a  chain 
official,  "but  dozens  of  manufacturers  have  frankly  told  us  they 
could  not  afford  to  antagonize  the  jobber.  Most  of  us  do  not 
even  try,  but  buy  of  the  jobber  on  a  brokerage  basis. 

"But  in  the  end  this  very  trouble  caused  by  the  jobber  will 

prove  his  undoing,  because  the  chain  system  will  finally  get  a 

Wm  P       ^^*^^^^^»  ^^^  when  it  does,  the  corner  grocer  can't 

JoblJ^^  compete,  simply  because  he  is  under  the  jobber's  iron 

Undoing  hand  and  must  pay  an  average  of  15  to  20  per  cent. 

profit  to  get  his  goods,  which  is  exorbitant  and  a  crime 

for  which  the  jobber  shall  certainly  pay. 

"Of  course,  the  jobber  claims  he  is  performing  an  economic 
service,  charging  but  10  per  cent,  for  his  work.  But  extrava- 
gance in  management,  strenuous  competition,  and,  most  of  all, 
cupidity  (since  the  grocery  business  has  simply  belonged  to  the 
jobber— the  retailer  being  little  more  than  a  distributing  unit), 
have  caused  him  to  exact  25  to  50  per  cent,  profit  in  numerous 
cases,  and  100  per  cent,  is  not  unknown. 

"  It  is  said  that  even  if  the  jobber  loses  the  city  he  still  has  the 
country'.  But  to^lay  Kroger,  out  West,  is  doing  a  big  wholesale 
business  selling  at  cost,  plus  3  to  5  per  cent.    How  does  that 


THE  CHAIN  STORE 


265 


please  the  wholesalers?  What  Kroger  is  now  doing  in  a  pioneer 
way  many  chain  systems  will  do,  and  the  jobber  just  simply  can- 
not compete. 

"The  chain  system  is  most  prosperous  here  in  the  East,  of 
coiu-se.  But  it  is  getting  a  foothold  in  the  W^est,  and  the  same 
manufacturers  who  are  selling  the  Eastern  chains  because  com- 
petition forces  them  to  do  so,  while  refusing  to  sell  the  Western 
chains,  will  eventually  have  to  sell  them,  too,  there  is  no  doubt 
about  it." 

This  is  the  one-sided  view  of  a  chain  official,  but  there  is  truth 
in  it.     The  chains  are  not  only  displacing  the  jobber's  former 

Chains    customers  in  the  city  and  buying  direct  for  their  own 

Taking    supply,  but  they  are  beginning  to  take  the  jobber's 

Jobber's    place  with  respect  to  the  rural  grocery.    The  independ- 
PUice     gjj|.  j.^y.^j  grocery  is  beginning  to  do  its  buying  from 
the  chains.    How  much  independence  this  is  going  to  leave 
the  rural  groceries  would  seem  to  depend  on  the  chains. 

The  picture,  however,  is  not  complete  without  a  reference  to 
the  fact  that  the  jobbers  are  forming  their  own  chains  in  order  to 
have  an  anchor  to  windward  in  the  time  to  come  and  that  the 
independent  grocers  are  organizing  in  greater  and  greater  num- 
bers to  get  the  buying  advantages  enjoyed  by  the  chains. 

The  next  step  after  this  for  the  chains  is  manufacturing.  It 
is  a  step  some  of  the  chains  and  retailers'  corporations  have 
already  taken  and  one  that  the  jobbers'  chains  are  likely  to  take 
before  many  years  under  present  conditions. 

No  manufacturer  can  regard  these  developments  with  in- 
difference. Whether  or  not  the  independent  dealer  saves  him- 
self is  sm^ly  an  important  question  to  the  manufacturer  if  one 
of  the  alternatives  is  for  the  market  to  become  consolidated  into 
chains  or  combines,  with  an  attendant  shrinkage  of  buyers  to 
compete  for  his  product.     .     .     . 

The  little  independent  retailer  cannot  possibly  make  such  a 

saving  because  the  chains  often  sell  cheaper  than  he  can  buy,  and 

_  his  efforts  to  balance  the  advantage  by  taking  up 

^il^s  "^'^  4^^^"  ^^^^?  v^\m%e  him  into  deeper  difficulties. 

Kedress  ^^^  ^^  ^c  combines  with  others,  he  betters  his  buying 
chances.  Perhaps  the  jobbers  will  not  sell  the  com- 
bine as  a  mere  buying  association,  though  some  such  associations 
are  able  to  force  concessions  from  the  manufacturers,  but  to  a 
corporation  in  which  the  individual  storekeepers  are  stock- 
holders the  jobbers  can  have  nothing  to  say.    The  Girard  Com- 


206 


THE  CHAIN  STORE 


pany,  of  Philadelpliia,  which  is  such  a  buying  combine  composed 
of  members  of  the  Retail  Grocers'  Association,  owns  its  own  ware- 
house and  carries  a  stock  as  high  as  $275,000  at  times. 

Nevertheless,  there  is  this  important  difference.  The  retailers' 
combines  deal  almost  exclusively  in  staples  and  standard  brands 
and  buy  as  wholesalers.  The  retail  chains  proper  not  only  do 
this,  but  they  buy  also  like  merchant  princes,  going  outside  of 
the  beaten  track  and  taking  what  look  like  speculator's  chances, 
such  as  the  Riker-Hegeman  buyer  took,  but  since  they  seldom 
fail  to  gauge  their  market  correctly,  generally  pocket  a  specula- 
tor's profits.  Tlie  Childs  Grocery  Company,  for  example,  which 
roasts  its  own  coffee,  has  ten  or  fifteen  tons  of  raw  coffee  on  hand 
at  this  minute,  which,  if  it  wished,  it  could  resell  at  wholesale 
at  an  advance  of  seven  cents  a  pound  profit,  coffee  having  gone 
up  that  much  in  price  since  they  bought  it. 

But  the  real  reason  why  the  chains  have  increased  their  ware- 
house facilities  so  enormously  and  sell  cheaper,  as  they  do  on 
many  items — one  of  the  biggest  reasons  of  all  reasons  for  the 
growth  of  chains — is  that  the  chains  afford  a  large  and  sure 
market  for  manufacturers  with  a  surplus  which  their  jobbers 
cannot  absorb,  and  which  they  must  turn  into  cash.  The  chain 
has  the  cash  and  will  always  consider  a  proposition  if  it  is  at- 
tractive enough. 

The  combine  seldom  gets  a  chance  at  this  sort  of  offer  because 
the  manufacturer  is  not  anxious  to  have  his  retailers  and  jobbers 
know  about  it.  Besides,  it  generally  takes  too  long  to  get  a 
definite  answer  from  the  combine,  whose  members  have  to  be 
canvassed  on  the  proposition,  and  they  are  slow  pay  compared 
with  the  chains.  The  manufacturer  can  go  to  the  chain,  get  an 
answer  in  five  minutes  and  have  his  money  in  ten  days.     .     .     . 

"I  could  do  an  excellent  business  on  my  saving  in  buying 
alone,"  a  grocery  chain-store  proprietor  told  Printers*  Ink, 
"even  if  I  did  not  make  a  cent  on  my  retail  stores!" 

The  corollary  of  this  is  that  the  nearer  a  chain  cares 
to  come  to  sacrificing  profit  in  its  retail  stores,  the 
greater  opportunity  it  unll  have  to  buy  cheaply.  It  can, 
if  it  pleases,  put  its  prices  down  so  low  that  it  barely  clears  the 
cost  and  yet  do  such  a  volume  of  business  in  consequence  that  it 
will  more  than  make  up  the  difference.  There  is  no  evidence 
that  any  chain  actually  is  at  the  present  time  carrying  out  such  a 
poHcy  in  any  radical  way.  It  has  been  said  that  the  United 
Cigar  Stores  Company  earns  its  dividends  not  out  of  its  stores, 


Win  on 

Buying 

Alone 


THE  CHAIN  STORE 


267 


I 


but  oi'i  of  its  buying f  its  real-estate  operations,  etc.  The  chains, 
at  all  events,  are  perfectly  willing  to  have  the  public  believe  it 
gets  its  piu'chases  at  cost.  Nevertheless,  entirely  apart  frona  the 
advertising  aspects,  it  is  patent  that  the  plan  has  great  possibiU- 
ties  both  from  the  executive  and  strategical  points  of  view. 

In  view  of  these  conditions,  there  is  no  particular  significance 
in  the  fact  that  in  the  grocery  field,  for  example,  the  cost  of  buy- 
ing ordinarily  is  6  per  cent,  for  the  jobber,  5  to  6  per  cent,  for  the 
chain,  and  only  2J  to  5  per  cent,  for  the  buying  combine  or  asso- 
ciation. No  significance,  that  is,  that  is  favorable  to  the  co- 
operative combine  at  this  time.  Its  saving  in  the  cost  of  doing 
business  may  offset  the  chain's  buying  advantage  on  some  staples, 
but  that  is  only  because  it  stops  at  these  staples  and  does  not  go 
on  to  the  bigger  deals.  It  takes  large  capital  and  a  man  respon- 
sible for  the  large  capital  to  swing  these  big  deals.  A  hired 
manager  representing  a  group  of  grocers  who  have  staked  only 
$500  or  $1,000  apiece  never  will  take  the  chances  under  present 
conditions. 

But  present  conditions  may  not  last;  will  not  do  so,  in  fact, 

because  they  cannot.    Competition  and  publicity  are  changing 

them.     However  it  may  look  now  to  the  independents, 

^**Mu^  the  chains  are  not  speculative  plungers  in  their  buying. 

Change    They  are  betting,  as  the  saying  is,  on  a  sure  thing. 

They  know  their  market.     They  know  values.     They 

anticipate  the  wants  of  the  seller  and  provide  capital  in  the 

shape  of  cash  or  credit.    And  their  capacity  to  absorb  and  sell 

brings  sellers  to  them.     ... 

From  the  eleventh  article  in  the  series,  which  covers  the  seUing 
activities  of  the  chains,  the  following  quotation  is  taken: 

*The  average  grocer  tiu-ns  his  stock  less  than  ten  times  a  year. 
A  better  grocer  will  turn  it  fifteen  or  twenty  times.  Several 
grocery  chains  probably  average  twenty  times  in  their  established 
stores.  One  chain,  Mr.  Bowers'  Stores,  in  Memphis,  is  said  to 
get  the  high  average  of  forty  turns  out  of  its  older  stores.  And 
forty-five  turns  are  claimed  for  one  store  of  the  Progressive  chain 
in  New  York  City.  This  is  almost  up  to  the  average  of  one  turn 
a  week  Uneeda  Biscuit  is  said  to  make  in  a  great  many  stores. 

The  matter  of  turnovers  is  something  well  worth  looking  into. 

*Pnnieri  Ink,  December  3,  1014,  p.  66, 


£68 


THE  CHAIN  STORE 


The  average  grocer  wants  a  gross  profit  of  25  per  cent,  on  a 
sale.  Some  chains  want  25  per  cent.,  also.  The  Bowers  chain 
is  said  to  take  only  12^  to  15  per  cent,  gross. 

The  average  grocer  counts  on  5  to  8  per  cent.  net.  Bowers  is 
said  to  take  only  2  per  cent.  This,  with  four  times  as  many 
turnovers,  would  enable  him  at  least  to  equal  the  average  gro- 
cer's earnings. 

The  turnover  is,  of  course,  that  of  the  stock,  not  the  whole 
capital.  Nevertheless,  the  comparison  of  stock  turns  for  chain 
and  independent  is  significant.  There  are  some  considerations 
that  qualify  the  difference.  The  average  grocery  chain  store, 
evspecially  one  of  the  cheaper  type,  carries  a  smaller  stock  than 
does  one  of  the  average  independents.  Moreover,  the  stock 
which  the  chain  carries  in  its  enonnous  warehouse  must  be  figured 
as  reducing  the  apparent  number  of  turnovers.  Again,  everj- 
chain  is  constantly  opening  new  stores,  few  of  which  pay  in  a 
large  way  from  the  start,  while  some  do  not  pay  at  all.  The 
grocery  chains  do  not  plan  to  lose  money  on  stores.  They  do  not 
wish  to  resort  to  ruinous  price-cutting  and  manipulation  if  they 
can  help  it.  They  are  careful  in  selecting  the  location,  but  if  the 
manager  cannot  make  the  store  pay  in  a  certain  length  of  time, 
sometimes  30  days,  sometimes  six  months,  it  will  be  closed. 
These  misadventures  pull  down  the  average  number  of  turnovers. 

Against  this  set  the  buying  and  storage  advantages.  The  cost 
of  buying  may  come  to  6  per  cent.,  as  mentioned,  but  the  saving 

4  Chain  ^^  ^^*^^  }^  ^^  ^^  P^^  cent.,  and  sometimes  more.  The 
Advantage  average  independent  may  carry  much  more  stock  and 
a  month's  supply  of  it,  but  rental  space  in  a  warehouse 
is  cheaper  than  in  a  store.     That  is  a  chain  advantage. 

The  grocery  chains  in  general  are  probably  not  so  forbearing 
as  the  Bowers  chain  seems  to  be.  They  take  a  larger  percentage 
of  profit  and  make  up  what  they  sacrifice  in  profit  on  standard 
brands  b^^  large  profits  on  their  own  private  brands — often  an 
abnormally  large  profit,  according  to  the  reports  of  investigators 
engaged  by  a  charitable  society  in  New  York  City,  who  reported 
that  tea,  coffee,  etc.,  priced  at  different  figures,  all  came  out  of 
the  same  box  and  was  of  one  quality !  But  this  might  almost  be 
called  a  trade  custom,  so  honored  is  it  suspected  to  have  been 
in  much  retail  practice.     .     .     . 

In  the  drug  field  the  situation  is  somewhat  different.  The 
average  druggist  turns  his  stock  three  or  four  times  a  year. 
Compare  this  with  the  stock  turn  of  twelve  times  which  the 


THE  CHAIN  STORE 


«f>0 


Riker-Hegeman  stores  are  said  to  average.  Conditions  here  are 
very  different  from  what  they  are  in  the  grocery  field.  The 
drug  chain  store  is  certainly  far  better  stocked  than  the  average 
independent,  and  carries  more  clerks,  even  from  the  beginning. 
It  would  be  out  of  the  question  to  expect  a  new  drug  store  to 
pay  in  30  days.  It  would  take  months  and  perhaps  even  a  year 
or  two.     The  other  stores  of  the  chain  have  to  carry  them. 

Tobacco-store  independents  average  four  turns  a  year.  Alert 
independents  quadruple  and  even  quintuple  that.  Some  United 
Cigar  Stores  are  said  to  have  turned  their  stock  fifty  times !  And 
here  again  the  history  is  one  of  rapid  extension  of  stores,  some 
of  which  may  not  pay  for  months  and  which  the  rest  have  to 
carry. 

In  the  5, 10,  and  25  cent  field  the  average  turnover  is  eight  to 
ten  times  a  year,  and  the  average  Woolworth,  Kresge,  Kress,  or 
McCrory  store  ten  to  twelve  times.  The  average  is  high  here, 
and  the  independents  and  chains  are  closer  together  as  to  records 
because  of  the  exceptional  education  which  the  independents  get 
from  the  jobbers,  like  Butler  Brothers,  for  instance,  who  leave 
no  excuse  for  a  retailer's  not  making  good. 

As  in  nearly  all  instances  the  extension  of  chain  stores  is  fi- 
nanced out  of  the  earnings  of  the  chains,  it  is  evident,  from  the 
rapid  growth  of  the  system,  that  report  has  not  exaggerated  the 
rate  of  turnovers.  There  is  a  great  gain,  as  we  saw  previously, 
in  delaying  payment  30  and  60  days — though  taking  the  cash 
discount  just  the  same — when  the  turnover  can  be  made  in  that 
time.  That  amounts  not  only  to  getting  an  extra  discount  from 
the  manufacturer,  but  to  using  his  money  to  do  business  on. 
And  the  advantage  is  all  the  greater  if  the  turnover  is  several 
times  a  month. 

The  turnover  is,  of  course,  merely  a  result,  of  which  the  causes 
are  reputation  for  low  prices,  service,  advertising,  and  other 
things,  but  it  is  an  objective  the  chains  have  before  them  all  of 
the  time.  They  would  have  us  believe  that  its  rapidity  is  due 
wholly  or  largely  to  the  famous  principle  of  "small  profits  and 
quick  returns." 

It  is  obvious  that  the  chain  does  price  very  low  on  a  score  or 
more  of  nationally  advertised  brands  in  its  line  which  have 
standardized  values  and  known  prices,  and  also  on  certain  goods 
whose  costs  are  more  or  less  known  to  custom,  but  it  is  possible 
for  any  one  to  satisfy  himself  by  shopping  around  and  inquiring 
of  any  retailers,  jobbers,  and  manufacturers  that  the  majority  of 


1 


270 


THE  CHAIN  STORE 


chains  do,  as  a  matter  of  fact,  in  many  instances  price  higher  on 
other  goods  and  get  a  larger  profit  on  their  own  private  brands 
than  do  the  independents  in  then-  neighborhood  or  in  similar 
neighborhoods. 

It  is  the  advertising  of  the  drug  chains,  the  better  stores,  the 
better  locations,  the  greater  variety  of  stock,  the  service,  that 
draw  the  custom.  The  public  may  think  it  cares  a  great  deal 
about  price,  but  it  will  not,  except  for  some  extraordinary  in- 
ducement, go  two  steps  out  of  its  way  to  buy  in  a  shop  that  is 
dingy  or  unprepossessing.  A  few  individuals  may,  but  the 
public  as  a  whole  will  not.     .     .     . 

Pricing  seems  to  have  three  methods.  The  first  method  is  to 
fix  the  price  of  all  goods  at  a  certain  percentage  over  the  cost  of 
goods  and  cost  of  doing  business.  This  margin  or  percentage 
IS  apt  to  be  high  in  the  little  independent  store,  particularly  out 
of  town,  where  there  is  httle  competition.  It  tends  to  be  low 
where  the  live  independent  or  chain-store  executive  has  grasped 
the  principle  of  rapid  turnovers.  Mr.  Bowers'  Stores,  of  Mem- 
phis, apply  this  system  inexorably  to  every  product  that  gets 
into  their  hands.  The  United  Cigar  Stores  probably  keep  ex- 
ceedingly close  to  it  much  of  the  time. 

The  second  method  of  pricing  is  to  apply  the  first  system  of 

pricmg  to  unbranded  goods,  but  maintain  the  price  on  all  na- 

B  St      ^^^^^^^y  advertised  brands  and  on  their  own  brands. 

Mahuain  ^^^Y  ^f  the  better  class  of  independent  stores  and 

Prices     5901^  chain  stores  in  different  lines  still  do  this.     They 
aim  at  quahty  and  service  and  get  fair  prices  on  ail 
their  products. 

The  third  method  of  pricing  is  one  that  is  based  largely  on 
competition.  The  district  manager  of  a  Philadelphia  grocery 
chain,  for  instance,  may  see  eggs  priced  extra  low  on  a  rival 
store's  bulletin,  and  at  once  order  a  corresponding  cut  in  his  own 
store's  stock.  Department  stores  employ  shoppers  to  tab  the 
prices  of  goods  displayed  in  other  stores.  Drug  chains  and  in- 
dependents watch  each  other  and  cut  on  all  proprietaries  in 
competition.  When  buying  is  irregular  and  speculative  and 
competition  is  brisk,  it  is  not  always  possible  to  price  in  the  same 
way  that  goods  are  priced  at  other  times.  Special  sales  and 
all  special  inducements  fall  into  this  third  class.  They  are 
often  combined  with  the  first  method. 

Actually  these  three  different  systems  simmer  down  to  two,  a 
system  of  pricing  branded  goods  and  a  system  of  pricing  un- 


THE  CHAIN  STORE 


271 


branded  goods.  Most  price-cutters,  as  stated,  cut  standard 
brands  for  the  purpose  of  attracting  custom,  but  sell  most  of 
their  other  goods  at  a  good  profit.  It  cannot  be  denied  that  the 
chains  have  helped  to  bring  prices  to  a  lower  level,  especially 
those  of  the  staples.  All  druggists,  for  example,  once  sold 
certain  salts  at  5  cents  an  ounce  or  two  ounces  for  5  cents,  when  it 
cost  only  \\  cents  a  pound.  They  now  have  to  sell  it  at  5  cents  a 
pound,  because  the  chains  do. 

The  pricing  of  unbranded  or  relatively  unknown  goods  seems 

to  be  generally  on  the  theory  of  charging  about  all  the  traffic  will 

bear,  unless  a  special  drive  is  being  made.     Ordinarily 

Traf^  the  chain  store  will  take  50,  75,  or  100  per  cent,  on 
WiU  Bear  rubber  goods,  toilet  goods,  or  other  sundries  just  as 
quickly  as  the  independent  will  do  it.  When  one  of 
the  chains  recently  changed  hands  the  new  management  is  said 
to  have  marked  prices  up  10  per  cent,  all  along  the  line.  The 
fact  is,  chains  and  other  price-cutters  cut  prices  on  established 
brands,  that  is  where  the  cut  shows  to  the  public^  and  do  not  cut 
prices  where  they  do  not  have  to. 

The  average  chain  does  not  want  to  cut  any  lower  on  standard 
brands  than  it  has  to.  It  will  take  a  profit  when  it  can,  but  the 
effect  of  the  competition  on  standard  brands  is  to  drive  their  price 
lower  and  lower,  and  at  length  the  chain  is  wiUing  to  take  a  loss 
for  the  sake  of  the  advertising  and  the  effect  cut-throat  competi- 
tion has  on  its  competitor.  But  it  will  drop  the  brand  quickly 
as  a  leader  when  the  profit  has  been  squeezed  out.  It  may  keep 
it  to  supply  the  demand  already  created,  but  it  will  not  push  it. 
Nor  will  the  independents  push  it,  nor  carry  it  if  they  can  help 
it.  .  .  .  The  chain  theory  of  merchandising  is  to  give  the 
public  exactly  what  it  wants.  If  it  can  satisfy  the  customer  and 
bring  him  back  again  and  again,  it  will  make  many  profits  that 
will  outweigh  the  one  large  one  that  might  possibly  be  secured 
from  substitution.  Aggressive  substitution,  besides  risking  the 
customer's  possible  dissatisfaction  and  the  waste  of  the  clerk's 
time,  involves  the  great  expense  of  maintaining  clerks  able  to 
substitute.  It  is  cheaper  to  serve  the  public  as  the  chain  claims 
it  does. 

The  Owl  Drug  Company,  of  San  Francisco,  has  a  sign  posted 
on  its  stores  threatening  with  dismissal  any  clerk  who  shall  sub- 
stitute. President  Miller  says  he  has  actually  discharged  clerks 
for  doing  so.  This  is  contrary  to  the  general  impression  of 
chain  methods,  but  it  is  thoroughly  in  line  with  modern  mer- 


^ 


I 


272 


THE  CHAIN  STORE 


chandismg  principles.  The  Owl  clerk  is  instructed  to  give  the 
customer  exactly  what  she  or  he  wants.  After  the  money  has 
been  paid  and  the  standard  goods  wrapped  up.  the  clerk  is  ex- 
pected to  ask  if  the  customer  has  ever  tried  the  private  brand  of 
the  house  and  if  she  would  not  hke  to  try  it  next  time,  or  if  he 
cannot  sell  her  something  else  in  the  line. 

So  far  as  the  national  manufacturer  is  concerned,  this  is  sub- 
stitution just  as  much  as  if  it  had  been  effected  in  the  first  place 
It  can  make  no  difference  to  the  manufacturer  whether  the  sub- 
stitution IS  practised  before  or  after  a  given  sale.  If  his  goods 
are  being  displaced  at  the  point  of  sale  by  the  man  he  depends 
on  to  sell  them,  that  is  enough  for  him.  The  existence  of  the 
retailers  private  brand  is  evidence  that  he  intends  to  sell  it, 
and  IS  the  first  step  in  substitution. 

It  cannot  be  alleged  that  there  is  any  moral  obliquity  in  the 
Cham  or  the  independent  handling  private  brands  of  its  own 
It  is  proper  that  the  public  should  have  the  fullest  experience 
it  desires  in  brands  and  that  standard  brands  and  private  brands 
be  allowed  to  compete  to  the  fullest  extent.  The  unfairness 
consists  in  allowing  stores  which  are  largely  though  not  in  a  legal 
sense  m  the  nature  of  "common  carriers  "  to  discriminate  in  favor 
of  their  own  brands  and  by  price-cutting  to  transfer  to  their  mm 
brandy  the  good  will  of  the  nationally  advertised  brands.     .     . 

It  has  been  necessary  to  deal  at  such  length  with  so  important 
a  part  of  selling  as  pricing  is  that  we  can  only  summarize  the 
comparison  of  chain  and  independent  methods  in  other  respects. 
The  chains  in  general  have  developed  standards  in  every  de- 
partment of  selling.  And  the  standards  represent  the  best  way 
of  doing  the  particular  thing  at  the  least  cost.  It  is  a  whole- 
saling of  method.  The  appearance  of  the  stores,  the  fixtures, 
the  selection  of  stock,  its  display,  the  advertising,  selling,  adjust- 
ment of  complamts,  perfection  of  service,  the  training  of  sales- 
men—all have  been  studied  and  systematized  into  as  near  auto- 
matism as  It  IS  possible  to  get  it.  This  cuts  out  waste  and  re- 
duces costs  of  operation. 

The  principle  is  the  same,  whether  it  has  to  do  with  cheap 
grocery  chain  stores  on  side  streets,  or  high-class  drug  stores 
occupying  the  best  corner  locations  in  the  city  and  emplovin*' 
high-grade  help.  The  Philadelphia  grocery  chains  hire  irnmi'^ 
grants  at  low  salary,  just  as  our  traction  systems  do,  because  the 
work  has  been  methodized  to  the  point  where  it  requires  the  least 
possible  amount  of  instruction,  supervision,  and  personal  initia- 


THE  CHAIN  STORE 


273 


tive.    The  5  and  10  cent  stores  employ  girls  at  $3  and  $4  a 
week,  rarely  more. 

The  Owl  Drug  chain  on  the  Pacific  Coast  enables  its  sales- 
people to  make  relatively  high  earnings  and  places  a  high  re- 
sponsibility on  them,  but  they  are  by  no  means  abandoned  to 
their  own  devices.  On  the  contrary,  they  are  more  carefully 
sui>ervised  than  the  low-paid  immigrants.  The  standards  are 
there:  they  have  only  been  set  higher.     .     .     . 

These,  of  course,  are  by  no  means  all  the  lines  in  which  the 
chain  stores  have  been  able  to  work  out  for  themselves  advan- 
tages in  their  selling  operations  as  compared  with  their  inde- 
pendent rivals.  In  the  training  of  clerks  in  the  organization  of 
the  store  and  in  the  standardizing  of  the  selling  processes,  they 
have  achieved  remarkable  results. 

The  fourteenth  article,  which  is  the  last  in  the  series,  makes  a 
summary  of  the  findings  of  the  investigators: 

*The  facts  elicited  by  Printers*  In¥s  investigation  of  chains 
point,  we  feel  safe  in  asserting,  to  only  one  set  of  conclusions: 

First,  that  the  leading  retailers'  chains  enjoy  at  the  present 
time  many  and  important  advantages  over  the  independent 
retailers,  even  when  the  latter  are  organized  in  co-ooerative 
associations  and  corporations. 

Second,  that  they  will  enjoy  these  advantages  and  possibly 
new  ones  in  addition,  in  greater  or  less  degree  for  an  indefinite 
period  (which  may  perhaps  be  eight  or  ten  years),  if  no  legisla- 
tion is  enacted  or  judicial  decision  handed  down  condemning 
certain  practices  as  "unfair  competition"  or  "against  public 
policy." 

Third,  that  many  new  chains  will  rise  to  compete  w4th  the 
older  ones,  but  that  the  more  significant  phenomenon  will  be  the 
still  more  rapid  development  of  organization  among  the  inde- 
j)endent  retailers. 

Fourth,  that  the  independents  and  their  combines  will  pro- 
gressively adopt  the  generally  superior  methods  employed  by 
the  chains,  and  that  such  independents  as  do  not  do  so  will  be 
eliminated  and  their  place  will  be  taken  by  other  merchants. 

Fifth,  that  the  eventual  supremacy  of  the  independents  in 

^Printers'  Ink,  December  24,  1914,  p.  66. 


I 


» i: 


:l 


274 


THE  CHAIN  STORE 


co-operation  will  be  established  and  the  chain-store  movement 
checked  and  perhaps  reversed.  Whether  this  shall  be  the  res- 
toration of  the  middleman  or  jobber  system  of  distribution, 
now  passing,  though  of  course  on  a  higher  plane  of  organization, 
or  whether  it  means  a  new  form  of  compact  organization  will 
depend  upon  whether  the  necessity  for  it  continues. 

It  should  be  obvious  that  the  fate  of  national  advertising  and 
even  national  trademarks  will  be  profoundly  affected  either 
way,  and  also  that  they  are  being  affected  now,  and  were  being 
affected  before  the  war  in  Europe  and  before  the  recent  de- 
pression set  in;  in  fact,  ever  since  the  chains  and  department 
stores  began  to  cut  prices  and  derive  encouragement  in  it  from 
the  decisions  of  the  Supreme  Court.  It  is  impossible  to  separate 
the  question  of  what  will  become  of  the  chains  or  the  independ- 
ents or  of  national  advertising  from  the  question  of  whether 
price-cutting  and  "inside"  prices  will  continue  to  be  held  legiti- 
mate. 

But  before  we  touch  upon  these  relations,  let  us  briefly  sum- 
marize the  findings  of  our  investigation  into  chain  stores. 

It  has  taken  several  months  to  gather  the  facts.  We  have 
seen  that,  speaking  conservatively,  there  are  more  than  2,000 
chains,  both  retailers'  and  manufacturers*,  comprising  in  all 
25,000  retail  stores.  We  have  shown  the  rapid  growth  in  each 
important  field.  We  have  noted  the  increasing  alarm  of  the  in- 
dependent retailers,  an  alarm  which  has  now  begun  to  seize 
upon  the  manufacturers,  as  the  independents  in  turn  have  begun 
to  organize  and  ask  for  the  same  buying  privileges  which  the 
chains  and  department  stores  and  mail-order  houses  have  en- 
joyed. 

By  chains  we  particularly  mean  retailers^  chains  under  one 
ownership  and  direction  and  have  in  mind  chiefly  those  which 
.  cut  prices  on  trademarked  goods.  There  are  also 
Pn^c^'  retailers'  chains  which  do  not  cut  prices  and  there 
ing  Chains  ^^  manufacturers'  chains.  We  have  considered 
these  and  counted  them  in  as  evidences  of  con- 
centration due  to  quantity  buying  at  quantity  discounts,  and 
often  **inside  prices"  as  well,  but  we  have  paid  special  attention, 
as  noted,  to  the  retailers'  chains,  particularly  those  in  the  drug, 
grocery,  and  tobacco  fields,  which  are  the  storm  centres  of  much 
comj>etitive  merchandising. 

We  first  compared  the  financing  of  the  chains  with  that  of 
the  independent  stores  and  found  that  there  is  an  advantage  in 


THE  CHAIN  STORE 


275 


favor  of  some  of  the  chains,  due  to  the  fact  that  their  stock  can 
be,  and  is,  dealt  in  by  the  public,  and  that  the  stores  derive 
some  advertising  benefit  from  that.  Also  to  the  fact  that  the 
stock  ownership  may  be  scattered  and  the  public  thus  be  taken 
into  partnership.  Shares  in  the  Whelan  enterprises  are  put  out 
in  five  and  ten  dollar  denominations  for  that  purpose.  This  is 
also  the  standard  practice  with  the  chains  and  big  industrial 
corporations  in  England.  The  independent  store  has  no  such 
opportunities.  It  has  to  go  it  alone.  But  if  the  independents 
organize  and  incorporate,  the  chains'  advantage  in  this  respect 
can  be  neutralized. 

In  organization,  the  chain  has  had  the  great  advantage  of 

being  able  to  do  business  on  so  large  a  scale  that  it  can  support 

Can  Em-      ^^^  ^^  ^^^^^  experience  and  talents  who  can  divide 

j>%  mi     ^^^  ^^^^  ^^^  specialize.     The  independent  man,  on 

Men        tlie  other  hand,  finds  it  difficult  to  be  at  once  a 

general  executive  and  a  specialist  on  every  point. 

Nevertheless,  the  chains'  advantage  is  one  that  cannot  extend 

indefinitely.     What  the  chains  have  found  out  about  business 

IS  being  passed  along  to  the  independents. 

In  the  locating  of  stores  and  operation  of  renting  and  handling 
real  estate,  the  present  advantage  again  must  lie  with  the  chains 
which  often  save  store  rent,  and  make  a  profit  on  their  realty 
operations.  But  this  can  be,  and  is  certain  to  be  in  time,  copied 
by  the  combines. 

The  chains  did  in  the  beginning  have  great  buying  advantages, 
and  still  do,  over  most  independent  retailers;  but  the  co-operative 
organizations  are  already  not  far  behind  the  chains  on  staples 
and  can  with  better  organization  meet  them  on  an  even  basis. 
The  chains'  advantage  of  getting  "inside  prices"  as  they  do  at 
present  will  be  nullified  by  the  combines'  competition.  Dating 
abuses  will  be  abolished  or  balanced.  Evolution  is  driving  the 
chains  into  manufacture,  and  the  combines  will  probably  do  the 
same  even  though  many  of  them  are  now  loyal  to  the  manu- 
facturers. 

The  present  selling  advantage  of  the  chains  over  most  inde- 
pendents is  shown  by  the  much  greater  rapidity  of  their  turn- 
overs.    In  some  lines  and  in  some  respects  these  advantages 
Chains'       are  due  wholly  to  legitimate  buying,  selling,  and  pric- 
SeUing       ing.     In  others  it  is  due  to  manipulation  of  stores  or 
Advantages    departments  so  as  to  carry  some  at  small  or  no  profit, 
and  discourage  competition.    They  push  their  own  brands. 


n 


-4 


276 


THE  CHAIN  STORE 


When  they  have  many  stores  in  a  locality  they  can  advertise 
locally,  which  independents  cannot  do,  alone.  Premium  ad- 
vertising is  a  strong  feature  with  most  chains.  But  all  these 
are  temporary  advantages  which  the  independents  can  neutral- 
ize, and  already  are  beginning  to  neutralize,  by  organization. 
National  advertising  has  been  started  by  the  combines  before 
the  chains. 

When  we  come  to  sales  management  and  personnel,  we  find 
the  glaring  weakness  of  the  chain.  Inadaptability  of  salespeople 
who  can  with  difficulty  be  handled  in  the  mass  give  great  advan- 
tage to  the  independent  storekeeper  who  has  only  a  few  people 
to  control  and  educate  and  those  under  his  personal  supervision. 
Lack  of  competent  managers  limits  and  delays  extension .  Graft- 
ing is  a  great  occasion  of  loss. 

The  chains  are  seeking  to  overcome  these  disadvantages,  but 
they  can  never  in  the  nature  of  things  get  the  same  kind  of  serv- 
ice out  of  cheaply  paid  employees  that  independent  proprietors 
can  give,  particularly  when  the  profits  now  going  to  chain-store 
proprietors  shall  be  going  into  the  pockets  of  the  independent 
proprietors.  A\Tiile  the  independents  are  short-sighted  and  in- 
capable, chain-store  automatic  selhng  will  rout  them.  They  have, 
however,  begun  to  learn,  and  through  organization  will  leam 
faster. 

In  accounting  the  chains  have  no  natural  advantage  over  the 
independent  retailer,  although  at  present  they  utilize  the  best 

methods  while  the  independents  generally  do  not. 

A      nfn       '^^®  chains'  cost  of  doing  business  is  generally  reputed 

Admntc^c  ^^  being  greater  than  the  independents'.     This  is  a 

mistake.    The  total  overhead  of  the  chains  is  often 

very  much  larger,  but  when  this  is  divided  into  a  large  number 

of  stores  doing  business,  it  often  shows  surprising  figures.     But 

this  can  hardly  go  on.    The  greatest  savings  by  system  in  the 

chains'  organization  have  already  been  made.    They  can  hardly 

be  repeated,  except  in  the  organization  of  other  chains  and  the 

independents.     Competition  will  bring  the  costs  up. 

There  is,  in  short,  apparently  not  one  advantage  the  chains  now 
enjoy  which  cannot  and  will  not  be  cut  down  in  time  by  the  in- 
dependents. Even  the  manipulation  of  stores  and  departments, 
and  in  cutting  prices  and  carrying  stores  and  departments  at  a 
loss  in  one  locality  in  order  to  kill  of!  competition,  is  not  solely 
their  opportunity.  The  retailers'  co-operatives  could  easily 
meet  it  by  supporting  a  local  member  in  fighting  back.     It  is  a 


THE  CHAIN  STORE 


je77 


mere  detail  of  organization.  But  there  is  likelihood  this  kind  of 
competition  will  be  declared  unfair  and  penalized.  Although 
the  courts  have  not  yet  passed  on  it  directly,  it  was  one  of  the 
condemned  practices  of  the  old  Oil  Trust. 

The  real  superiority  of  the  chains  over  the  independents,  even 
when  combined,  is  a  superiority  derived  from  the  past.  They 
were  first  to  develop  combination  of  resources  and  co-operation 
of  personnel  on  a  large  scale,  and  are  still  profiting  by  it.  They 
have  standardized  organization  and  selling  methods  and  cut  out 
wastes.  In  common  with  nearly  all  retailers,  they  have  been 
guilty  of  unfair  competition,  but  they  do  not  owe  their  success 
entirely  to  it  as  many  observers  think.  They  have  made  a^eat 
contribution  to  American  business. 

But  against  this  present  superiority  set  the  highly  important 
fact  that  these  standard  practices  to  which  the  chains  owe  their 
rapid  growth  are  no  longer  their  exclusive  possession,  their  in- 
valuable trade  secrets.  They  were  developed  at  great  cost  over 
many  years  by  high-salaried  and  profit-sharing  executives;  but 
they  are  now  known  to  all  live  independent  dealers.  Men  are 
continually  going  out  from  the  chains  and  opening  stores  and 
chains  of  their  own.  Trade  papers  in  each  line  explain  and  dis- 
cuss every  detail  of  their  management.  The  result  is  that  the 
methods  have  become  public  property,  the  recognized  standard 
ways  of  doing  business  at  retail  which  good  executives  are  ex- 
pected to  know  and  practise,  and  which  ultimately  all  will  prac- 
tise. 

Thanks  to  the  chains,  aU  retail  business  is  being  standardized^ 

and  in  consequence  the  chains  are  losing,  even  if  slowly,  the 

enormous    advantages    they    started    with.     Unless 

Retail     they  can  find  new  advantages  to  take  their  place,  they 

B^^  will  find  it  harder  and  harder  to  shake  off  even  the 

Standard-  kittle  fellow. 

ized  Can  they  find  such  advantages?    They  have  already 

found  one.  The  only  big  outstanding  improvement  in 
method  the  United  Cigar  Stores  have  made  in  the  last  five  or 
six  years  is  their  recent  decision  to  open  agencies  in  cities  and 
towns  where  they  have  no  stores.  A  smaller  chain  claims  this 
was  its  idea  first.  It  is  a  big  idea  anyway,  for  this  reason:  that 
agencies  will  enable  the  United  Cigar  Stores  to  blanket  the  coun- 
try as  it  could  not  otherwise  do  for  years  and  then  advertise  its 
01071  private  brands  nationally y  as  well  as  locally. 

The  first  chain  to  get  national  distribution  and  begin  national 


II 


■V. 


£78 


THE  CHAIN  STORE 


advertising  will  have  an  enonnous  potential  advantage  o\'er  its 
competitors. 

Faced  by  two  kinds  of  combination,  that  of  co-operating  retail- 
ers and  co-opcraling  manufacturers,  and  possibly  a  combination 
of  the  two,  we  do  not  see  how  the  chains  can  prevail. 

i^J"'^  Their  weakness,  as  said,  is  in  their  employees.  They 
Co-operate  ™"s*  P^'^  them  exceptional  training  to  become  reliable 
machines,  and  yet  training  qualifies  them  for  higher 
compensation  which  the  chains  will  be  unable  to  give  in  most 
instances.  The  same  thing  will  not  l>e  true  of  the  co-operative 
retail  movement,  unless  the  retail  proprietors  practise  the  same 
methods.  If  they  share  their  earnings  with  their  employees  in  a 
larger  way  than  the  chains  do,  they  will  get  the  better  employees 
and  the  better  business. 

But  what  of  the  manufacturers?  It  must  be  said  that  our 
conclusions  as  to  the  chains,  which  might  also  be  applied  to  many 
big  department  stores,  are  not  shared  by  these  latter. 

**  All  of  these  price-maintenance  suits,  appeals  to  Congress,  and 
declamations  in  the  press  and  trade  journals  are  the  last  frantic 
struggles  of  the  manufacturers  to  retain  their  power,"  said  a 
leading  department-store  merchant  the  other  day.  "The  time 
is  close  at  hand  when  there  will  be  no  manufacturers'  brands, 
but  the  public  will  walk  into  our  stores,  look  over  the  stock  and 
choose  goods  on  their  merits  as  they  appear  to  them.  There  tciU 
be  no  national  advertising  to  bias  their  judgment.  We  ourselves — 
the  retail  trade — ^will  do  all  the  advertising." 

A  chain-store  proprietor  might  have  said  the  same  thing. 
That  is  the  way  it  looks  to  him. 

Some  manufacturers  see  a  menace  in  the  growth  of  the  co- 
operative combine. 

In  either  case,  why?  Because  they  see  that,  whichever  has 
the  power,  the  temptation  to  insist  on  buying  cheap  and  substi- 
tuting its  own  private  brands  for  the  nationally  advertised  brand 
will  be  the  same. 

The  power,  as  pointed  out,  is  being  secured,  chiefly  though 
not  exclusively,  through  quantity  purchases  at  quantity  prices, 
as  well  as  *' extra  discounts."  The  cutting  of  prices  may  not 
be  general,  may  concern  only  a  few  brands,  but  it  conveys  the 
idea  of  relative  cheapness  and  starts  the  custom  toward  the 
chain  store.  But  the  danger,  of  course,  is  not  so  much  in  the 
fact  that  the  chain  cuts  the  price  on  merely  twenty  or  thirty 
items  now,  but  that  the  chains  or  combines  will,  if  their  growth 


THE  CHAIN  STORE 


279 


continues  and  they  transact  an  ever-larger  volume  of  the  business 
of  the  country,  have  it  in  their  power,  as  it  certainly  will  be  to 
their  interest  to  stop  spending  their  money  in  advertising  the 
national  brands,  and  push  their  own  brands  more  and  more  ex- 
clusively. 

It  will  be  time  enough  to  cross  the  bridge,  however,  when  we 
come  in  sight  of  it.  Many  things  may  happen  in  the  meantime. 
The  restoration  of  price  maintenance  by  contract  or  notice  would 
unquestionably  hurt  the  chain-store  movement.  So  would  the 
curtailment  of  "inside  prices,"  whether  forbidden  by  law  or 
carried  out  by  the  manufacturer.  The  whole  manufacturing 
and  advertising  world  is  still  dazed  by  the  decisions  of  the  Su- 
preme Court,  which  have  so  powerfully  aided  in  the  revolution- 
izing of  business.  When  it  recovers,  there  will  be  a  new  chapter 
written. 

(8)      CONCRETE   INSTANCES    OP  THE  EFFECTS  OF   CHAIN  STORES 

UPON  SELLING  PROBLEMS 

A  striking  example  of  what  large-scale  selling  operations  may 
mean  to  a  large-scale  producer  is  found  in  the  case  related  in  the 
following  unsigned  article  which  tells  how  a  cotton  mill  used  to 
contract  with  the  Woolworth  Company  to  tide  over  a  slack 
period  in  business: 

*A  cotton  mill  up  in  New  England  recently  made  an  arrange- 
ment with  the  F.  W.  Woolworth  Company  for  the  latter  to  take 
its  entire  output  of  mercerized  crochet  cotton  and  sell  it,  under 
the  name  of  **  Woolco,"  in  the  company's  sjnadicate  of  five-  and 
ten-cent  stores. 

This  was  real  news  to  the  trade  when  it  first  learned  the  fact 
through  the  forty-two-inch  advertisement  appearing  over  Wool- 
worth's  name  in  a  woman's  magazine.  Ordinarily,  there  would 
have  been  no  heart-burning  over  the  arrangement,  but  on  ac- 
count of  the  European  war,  the  lot  of  the  cotton  mills,  as  everj^- 
body  knows,  has  not  been  an  excessively  happy  one.  Cotton  is 
low,  the  demand  is  slack,  and  few  mills  have  been  looking  for 
business  in  advance  of  a  general  business  recovery.  Conse- 
quently, this  forward  drive  of  one  mill  in  a  rather  unexpected 

*PnnteT3  Ink,  April  1.  1916,  p.  1. 


> 


280 


THE  CHAIN  STORE 


direction  has  set  other  mills,  advertising  agencies,  and  publica- 
tions to  thinking. 

Markets  like  the  five-  and  ten-cent  stores  are  not  common. 
They  are  not  open  to  all  manufacturers.  Thousands  of  the 
readers  of  Printers'  Ink  have  no  interest  in  them  whatever,  but 
there  is  one  thing  at  least  that  these  store  syndicates  stand  for 
that  is  of  the  most  vital  interest  to  every  distributor  in  the 
country:  they  knmv  their  market,  they  know  what  the  public  will 
buy,  or  if  they  do  not  know  that  in  every  case,  they  know  how 
to  find  out. 

The  manufacturer  who  goes  to  Woolworth  can  learn,  without 
expense,  almost  as  it  were  by  pressing  a  button,  what  they  can 
and  what  they  cannot  sell  in  the  750  or  800  Woolworth  stores, 
located  in  practically  every  city  of  25,000  or  more  throughout 
the  country,  and  in  many  other  stores  in  cities  as  low  as  5,000 
population. 

A  manufacturer,  we  will  say,  has  a  product  he  wants  to 
market,  but  he  hesitates  and  is  uncertain  about  the  extent 
of  the  possible  demand.  Will  people  really  buy  it  at  the 
price?  Does  it  look  too  cheap?  K  he  were  sure  of  the  market 
he  would  put  more  value  into  it  at  the  beginning,  and  dis- 
courage possible  competition.  But  he  is  not  sure.  If  he  could 
only  get  a  line  on  what  the  popular  demand  is  for,  on  what  people 
tvill  buy  I 

Well,  if  he  can  sell  in  the  five-  and  ten-cent  field,  the  problem 
is  already  solved  for  him,  as  it  would  be  solved  for  others  if  the 

Public  principle  were  extended  to  other  fields.  No  other 
"Wants"   field  has  been  so  organized  and  systematized  as  this. 

Revealed  and  in  no  other  is  it  possible  to  find  out  with  so  little 
hy  System  expense  and  so  much  assiu*ance  of  the  correctness  of 
the  answer. 

You  send  your  salesman,  or  go  yourself,  say,  to  one  of  the 
25  or  30  Woolworth  buyers.  You  await  your  turn  in  a  tremen- 
dous crowd  outside  the  door.  When  it  comes,  you  state  your 
proposition.  If  it  comes  in  the  class  of  old  propositions,  it  is 
accepted  or  rejected  on  the  spot.  The  buyer  is  expert  and  knows 
values.  When  the  article  is  a  novelty,  that's  difiFerent.  It  may 
be  tentatively  accepted.  "Send  samples  and  I  will  look  them 
over,"  you  are  told.  You  do  so.  Two  or  three  weeks  elapse. 
Meanwhile  the  system  is  working.  Then  comes  the  decision. 
The  proposition  is  turned  down  or,  presto!  the  suction  power  of 
nearly  800  stores  is  clapped  on  to  your  plant. 


THE  CHAIN  STORE 


281 


It  is  all  done.     You  are  paid  in  cash,  but  there  would  be  no 

doubt  about  the  sales  in  any  case.     Everything  from  buying  to 

selling  is  almost  perfectly  automatic.     You  drop  the 

^AlT^^  goods  into  the  buying  hopper,  they  run  out  into  the 
Auiomaiic  retail  chutes,  fall  into  place  on  the  five-and-ten-cent 
tables  and  are  automatically  appropriated  by  the 
public.  Mistakes  are  just  about  impossible,  and  we  shall  pres- 
ently see  why.  The  goods  may  stick  in  a  few  stores,  but  they 
are  soon  bundled  out  of  there  and  moved  along  to  where  they  do 
sell. 

The  goods  actually  sell  themselves.  There  is  a  point  there: 
no  selling  pressure  whatever  is  exerted.  The  salesgirls  are  autom- 
atons. The  big  windows  and  the  counters  show  nothing  but 
goods.  Big  values  at  low  prices  match  up  with  the  wants  of  the 
crowds  that  come  in  to  browse  and  buy.  You  get  an  absolutely 
accurate  picture  of  what  the  people  uninfluenced  and  uneducated 
in  any  way  will  buy. 

The  truth  is  that  the  big  five-and-ten-cent  syndicate  like  Wool- 
worth's  is  a  buying  rather  than  a  selling  machine.  And  yet 
that  is  not  strictly  accurate.  It  sells  through  its  prices,  its 
values,  its  display,  the  store  location.  Only  not  through  what 
we  call  "sales  effort. ' *  All  the  effort  there  is  is  at  the  buying  end, 
which  is  the  big  end,  and  day  by  day  the  round-up  of  effort 
goes  on. 

It  is  hard  to  see  how  much  more  automatic  the  buying  could 
be  made,  but  you  never  can  tell.  Already  it  is  so  systematized 
that  the  old-time  buyers,  who  have  grown  up  with  the  business, 
and  taken  part  in  getting  up  steam  for  the  organization,  and 
cutting  out  the  wastes,  and  who  are  earning  $25,000  and  more  a 
year  under  the  profit-sharing  system,  will  soon  retire  and  leave 
everything  in  charge  of  younger  buyers,  who  inherit  the  system 
and  whose  earnings  are  consequently  much  less. 

And  what  is  the  system  which  can  cut  a  buyer's  earnings  per- 
haps in  two,  and  yet  get  equal  results?     How  can  you  system- 
atize taste,  choice,  and  all  that  sort  of  thing? 
SystemittZ'     j|.  |g  ^.j^^  simplest  thing  in  the  world — now  that  it 

Im  Seme  ^^^  heew  done — and  more  trustworthy  than  if  they 

had  had  a  corps  of  $50,000  buyers. 

The  system  consists  in  finding  out  what  the  public  habitually 

buys  in  the  stores  and  then  comparing  every  new  proposition 

with  it.    The  $25,000-a-year  men  are  not  valuable  so  much 

because  of  their  extraordinary  knowledge  of  values  and  ability 


282 


THE  CHAIN  STORE 


to  buy  cheap  as  for  their  ability  in  perfecting  the  system  which 
has  now  rendered  a  large  part  of  such  individual  knowledge 
useless.     ... 

Neither  salesgirls  nor  stock  clerk  were  required  to  know  prices 
or  values,  or  anything  more  than  the  place  of  the  goods.  This 
made  it  possible  to  dispense  with  all  but  the  cheapest  help  and 
to  replace  them  without  friction. 

Above  these  cash-girls  there  were  floor-walkers  and  above 
them  the  store  manager. 

In  the  beginning  these  store  managers  were  highly  important 
in  the  Woolworth  organization;  so  important  that  the  man  at  the 
head  yielded  them  49  per  cent,  of  the  net  profits  and  treated 
them  as  partners.  The  inspectors  who  afterward  became  a 
part  of  the  system  visited  these  managers,  and  discussed  im- 
provements in  the  most  tolerant  way.  Managers  often  re- 
mained for  years  in  the  possession  of  a  given  store,  and  made 
$5,000,  $10,000,  $15,000,  and  some  even  $25,000  or  even  more 
a  year.  Many  Woolworth  managers  used  to  come  down  to 
work  in  their  own  cars. 

The  importance  of  the  managers  appears  to  have  continued 
great  during  the  formative  period  and  practically  up  to  the 
time  of  the  merger;  that  is,  until  the  system  had  been 
^Shifted'^  developed  to  something  almost  self-operating. 

Around  ^^^  after  the  first  few  years  and  while  the  managers 
were  still  important,  it  was  realized  that  they  were 
too  important  to  be  allowed  to  remain  long  in  one  place. 
They  were  needed  for  organizing  and  systematizing  more  than 
they  were  for  running  the  system.  That  work  might  be  turned 
over  to  less  important  men. 

Their  contracts  therefore  ran  for  a  year,  and  they  rarely 
stayed  more  than  two  years  in  any  one  place,  but  were  moved 
on  into  new  territory  and  given  the  task  of  building  up  new 
outlets.  Sometimes  they  had  a  chance  to  make  even  more  than 
they  made  before,  but  generally  it  had  to  be  less,  because  the 
company  naturally  picked  out  the  best  cities  and  best  locations 
first,  and  expanded  progressively  into  less  and  less  desirable 
territory. 

Under  the  earlier  regime,  these  managers  carried  most  of  the 
store  experience  under  their  hats.  But  gradually  the  organiza- 
tion of  the  stores,  the  systematization  of  reports  and  the  develop- 
ment of  buying  sense  and  buying  power  made  the  functions  of 
the  manager  less  important.     More  and  more  initiative  went 


I 


THE  CHAIN  STORE 


283 


from  him  to  headquarters.  Methods  were  standardized  and 
inspectors  dropped  in  at  all  times  to  see  that  the  methods  were 
observed  and  that  the  stores  were  being  kept  up  to  the  standard. 
They  did  not  so  much  "consult"  the  managers  as  lay  down  the 
rules  and  spy  out  the  land. 

With  the  merger  and  the  new  economies  to  which  it  gave  rise, 
systems  became  more  self-sufficing,  and  the  profit-sharing  per- 
centage of  the  store  managers  was  cut  from  49  per 
^^P^^Ms^  cent,  to  35  per  cent,  and  25  per  cent,  and  even  15  per 
Q^  cent.  With  many  stores  it  is  now  8  per  cent.  Some 
managers  yet  made  $5,000  or  more  a  year,  but  few  if 
any  now  come  down  to  work  in  automobiles. 

That  which  made  this  saving  possible,  that  diminished  the  im- 
portance of  the  store  managers,  were  the  elaborate  reports  on 
the  stores'  condition,  amount  and  kind  of  stock,  receipts,  ex- 
penditures, etc.,  which  the  managers  were  obHged  to  make  daily. 
This  went  up  to  headquarters  and  occupied  a  large  corps  of 
bookkeepers  and  clerks  in  reducing  the  order  that  was  desired. 

The  system  was  ponderous  but  it  enabled  the  company  to 
know  just  how  many  sp>ools  of  thread,  pieces  of  lace,  screw- 
drivers or  nutmeg  graters  were  being  sold  day  by  day  and  in 
what  places,  how  much  was  in  stock,  etc.  In  other  words,  it 
furnished  a  daily  inventory  that  showed  what  the  people  were 
buying^  and  how  much,  and  where. 

As  there  was  no  problematical  element  of  "sales  effort"  to 
consider,  it  is  evident  how  much  this  simplified  the  buying. 
Every  buyer  knew  to  a  dot  what  the  demand  was  for  a  given 
article  the  week  before,  the  month,  year,  and  decade  before. 
He  knew  what  rate  of  increase  to  allow  for  new  stores.  Varia- 
tions in  good  and  bad  times  were  the  only  dubious  things  that 
had  to  be  considered. 

There  seemed  to  be  an  incalculable  factor  in  the  novelty,  the 

article  the  company  had  not  bought  before,  with  which  it  had 

no  experience.     Perhaps  you  think  that  here  at  last 

System  oj  ^^^  ^.j^^  ^^^  ^^ibA.  would  not  crack.     As  a  matter  of 

NomL  ^^^^»  t^^  buying  of  novelties  proved  no  more  difficult 
to  systematize  than  the  buying  of  staples. 

Novelty  prop>ositions,  looking  from  the  inside  out,  were 
of  two  kinds — those  that  had  to  be  snapped  up  quickly  and  those 
that  could  wait  for  the  system  to  work.  The  buyers  were  on 
tiptoe  to  snap  if  they  had  to  snap,  and  if  it  were  worth  while 
to  snap.    Otherwise  they  passed  it  up. 


I 


3B4 


THE  CHAIN  STORE 


But  with  every  other  kind  of  novelty  proposition,  the  rule  and 
practice  was  to  put  it  up  to  the  store  managers.  Their  verdict 
was  not  necessarily  final,  but  it  was  fonned  on  the  firing  Une 

and  it  counted. 

When  the  proposition  was  presented  the  buyer  asked  for 
samples,  and  those  samples  went  out  to  every  one  of  the  store 
managers.  As  this  was  a  matter  of  almost  daily  occurrence,  a 
blank  form  was  provided  for  the  answers,  and  on  this  the  man- 
agers told  what  they  thought  of  the  sample  and  its  sales  possi- 
bilities in  their  stores;  how  many  of  them  they  could  sell  in  a 
given  time,  whether  it  would  subtract  sales  from  something  else  in 
stock,  whether  it  would  be  good  for  window  display,  whether 
it  was  too  late  for  the  season,  and  many  other  questions  along 

this  line. 

The  sales  managers  filled  out  the  blanks  at  once  and  sent 
them  back.  The  retiu-ns  were  compiled  and  compared  at  head- 
quarters, the  tenor  of  the  answers  noted  and  reported  to  the 

buyer. 

That  was  the  buying  system.    The  buyers  who  stand  at  the 

head  of  it  are  all  men  who  have  been  drilled  in  it  from  the  stock- 

Buyers    ^oom  up.    They  have  watched  the  stock,  the  sales 

Graduates  force  and  the  crowd,  as  floor-walkers.    They  have 

oj  System  made  out  reports,  handled  help,  kept  in  touch  with 

headquarters  as  managers.    As  inspectors  they  have  studied 

many  stores  and  dealt  with  all  types  of  store  managers.     And 

when  they  got  into  the  buyer's  office  and  had  a  half-dozen  or 

dozen  lines  to  buy  they  knew  every  item,  every  value,  every 

house  that  sold  them;  they  knew  the  company's  policy  and  its 

buying  power,  and  they  had  the  elaborate  system  to  test  and 

back  up  their  judgment  as  well  as  keep  them  in  touch  with  the 

market  of  the  day.  . 

That  is  the  Woolworth  buying  system,  and  it  differs  very  little 
from  that  of  other  big  five-and-ten-cent  store  chains.  It  is 
almost  humanly  impossible  to  make  any  buying  mistakes  with 
such  a  system  as  that.  One  would  have  to  be  peculiarly  gifted 
to  break  through  the  cordon  of  safety  devices  and  involve  the 
house  in  any  disastrous  venture.  There  is  no  room  for  any- 
thing of  the  sort. 

There  is,  to  be  sure,  an  element  of  chance.  Conditions  do 
change  and  the  voice  of  even  700  or  800  store  managers  is  not 
the  voice  of  Providence.  But  minor  discrepancies  can  be  ad- 
justed.    "Stickers"  in  one  store  or  locality  can  be  shifted  to 


THE  CHAIN  STORE 


285 


another  where  they  have  gone  better.  There  is  always  a  way, 
and  the  system  takes  note  of  it. 

The  manufacturer  who  comes  to  the  syndicate  has  this  certi- 
tude, that  everything  he  could  possibly  do  to  test  out  his  propo- 
sition will  be  better  done  for  him. 

And  the  manufacturer  who  does  not  sell  the  five-and-ten- 
cent  store  trade  can  draw  some  excellent  suggestions  from  the 
system.     It  is  an  advantage  to  know  what  is  the  very 

MmT  1^^  ^^^^  '^  buying  efficiency.  It  might  be  possible 
to  pass  the  knowledge  of  it  along. 

There  is  one  more  important  buying  point  to  mention,  which 
illustrates  the  trend  of  the  times  and  shows  what  people  buy. 
Most  manufacturers  who  do  not  sell  the  five-and-ten-cent  syn- 
dicates doubtless  are  not  aware  of  the  point. 

The  Woolworth  company  expects  to  buy  the  articles  of  a 
certain  line  it  retails  for  10  cents  at  $8.50  a  gross.  A  manu- 
facturer calls  on  the  buyer,  shows  his  sample,  and  says: 

"  I  can  make  up  these  for  you  on  a  large  order  at  $8.25  a  gross." 

If  he  has  not  had  any  experience  with  the  stores,  he  expects 
to  have  a  long  argument  on  why  he  can't  sell  them  for  $8  flat  or 
at  least  $8.15.    The  buyer  surprises  him  by  telling  him: 

"We  don't  want  them  any  cheaper.  We  want  them  better. 
Here  are  some  other  samples  of  goods  like  yours.  Can  you 
put  better  value  into  yours  at  $8.50  so  that  it  will  show  ?  If  you 
can,  we  will  do  business  with  you." 

The  syndicate,  you  see,  is  looking  not  for  long  profits,  but  for 
the  rapid  turnovers  which  not  only  represent  healthy  trade  for 
the  minute,  but  are  the  surest  gauge  of  the  same  kind  of  pros- 
perity in  the  future.  Taking  a  long  profit  would  mean  stand- 
mg  still,  whereas  putting  more  and  more  visible  value  into  the 
fixed  prices  is  continual  publicity  and  attraction  for  the  store. 

It  is  the  fixed  prices  which  made  this  buying  policy  inevi- 
table for  the  more  or  less  staple  goods  with  which  people  are  f a- 
mihar,  and  any  improvement  in  the  appearance  of  which  they 
are  quick  to  note. 

With  novelties  the  case  is,  of  course,  different.  Quality  is 
then  a  secondary  consideration,  and  there  is  no  reason  for  the 
chain's  neglecting  to  buy  as  cheaply  as  possible.  And  the  same 
is  true  with  trademarked  goods,  whose  value  is  already  known 
and  fixed. 

So  there  is  the  system.  Before  it  was  perfected  everybody 
said  it  was  impossible,  it  could  not  be  done.     Now  that  it  has 


>        "! 


i 


286 


THE  CHAIN  STORE 


been  done,  they  say  it  is  over-systematized  and  cannot  last.  But 
the  earnmgs  of  all  of  the  big  ones  go  on  increasing,  with  the 
possible  temporary  exception  of  one  or  two  which  are  said  to  be 
sharing  the  misfortunes  of  certain  districts  where,  for  local  causes 
purely,  business  generally  is  in  a  stagnant  condition.  All  the 
other  syndicates  are  flourishing  in  spite  of  the  war,  and  Wool- 
worth's,  of  those  reporting,  shows  the  largest  earnings  per  $1 
invested. 

The  cash  basis  on  which  the  syndicates  operate  puts  them  in 
the  advantageous  position,  expecially  during  dull  times,  of 
eliminating  bad  debts  and  being  able  to  discount  all  their  bills. 
Woolworth  sales,  for  example,  totalled  $69,619,669  last  year 
and  accounts  and  bills  receivable  amounted  to  but  $146,818, 
or  two  tenths  of  1  per  cent,  of  the  sales.  Accounts  payable 
amounted  to  but  $179,486,  as  against  inventories  of  $10,491,040. 

Thus,  on  the  whole,  it  would  seem  pretty  safe  to  trust  the 
syndicates'  buying  experience  as  being  sound. 

There  is  a  suggestion  of  an  opportunity  for  co-operation  be- 
tween national  advertisers  and  well-conducted  chain  stores  in 
protecting  the  interests  of  the  public  in  a  circular  which  was 
issued  in  1914  by  the  Owl  Drug  Company  of  San  Francisco. 

This  company  operates  a  large  chain  of  retail  stores  on  the 
Pacific  Coast,  and,  while  at  one  time  it  was  reputed  to  employ 
both  price-cutting  and  substitution,  it  has,  in  recent  years, 
adopted  a  somewhat  different  plan.  It  has  based  its  appeal  to 
the  pubhc  more  on  the  quality  of  its  services  than  on  its  ability 
to  undersell.  This  fact  gives  to  the  circular  particular  interest. 
The  circular  is  as  follows: 

*For  some  time  manufacturers  have  resorted  to  conspicuous  advertising  to 
warn  the  public  against  the  practices  of  those  firms  which  offer  "something 
just  as  good"  when  standard  products  are  called  for.  We  wish  you  to  know 
that  we  are  in  perfect  sympathy  with  these  manufacturers,  and  we  hope  that 
the  time  is  not  far  distant  when  a  firm  making  a  false  statement  regarding 
another's  product  will  be  subject  to  the  extreme  penalty  for  Ubel. 

The  Owl  Drug  Company,  operating  20  retail  stores  on  the  Pacific  Coast, 
instructs  its  salespeople  to  sell  without  adverse  comment  any  proprietary  article 
called  for.  This  policy  of  The  Owl  Drug  Compwiny  means  that  we  give  manufac- 
turers unhampered  opportunity  for  the  sale  of  their  products,  and  without  calling 

*Pnnieri'  Ink,  June  18,  1914.  p.  St. 


THE  CHAIN  STORE 


287 


on  the  manufacturer  to  make  good  our  loss  wc  have  for  years  made  exchanges 
or  given  refunds  to  customers  dissatisfied  with  their  purchases.  We  now 
intend  to  broaden  our  policy,  and  to  announce  in  the  newspapers  that  if  any 
article  offered  for  sale  in  our  stores  proves  to  be  unsatisfactory  in  any  particular, 
we  will  refimd  the  purchase  price. 

To  be  able  to  adhere  to  this  policy,  which  we  believe  to  be  only  fair  to  the 
public  and  parallel  to  what  the  manufacturer  is  asking  of  the  distributor,  we 
must  have  the  approval  of  your  judgment  and  your  cordial  co-operation. 

W.  M.  Berg,  secretary  and  general  manager  of  the  Owl  com- 
pany, writes  Printers'  Ink  in  further  explanation: 

"This  means  that  any  patent  medicine  or  toilet  article  must  be 
guaranteed  to  the  extent  that  we  will  promptly  refund  the  pur- 
chase price  if  the  merchandise  is  not  as  represented  by  the  manu- 
facturer or  ourselves.  This  policy  should  appeal  to  the  manu- 
facturers who  are  honest  with  the  public. 

"One  of  our  circulars  is  being  mailed  to  every  manufacturer 
with  whom  we  do  business,  and  it  will  be  interesting  to  see  how 
they  receive  it.  One  thing  is  certain:  we  are  in  earnest  and 
intend  to  see  this  matter  through  on  the  Hues  indicated  in  the 
circular. 

"  It  is  just  possible  we  will  find  some  manufacturers  who  will 
not  protect  us  on  this  *  money  back*  proposition,  and  after  we 
have  used  all  the  moral  suasion  in  our  power,  if  they  are  still 
refractory,  we  intend  to  label  their  preparation  with  a  sticker  to 
the  effect  that  such  preparation  is  not  sold  on  a  'money  back* 
basis  because  the  manufacturer  will  not  stand  behind  his  product. 
We  believe  that  almost  every  manufacturer  will  prefer  to  stand 
behind  his  goods  rather  than  have  them  labelled  this  way  when 
they  leave  our  stores.*' 


I 

I 
I 


CHAPTER  Vm 

THE    WHOLESALER    AND     NATIONAL    ADVERTISING 

NEARLY  every  wholesaler  has  visions  of  controlling  at 
least  a  portion  of  his  trade  by  means  of  a  brand  or 
brands  which  he  owns.  When  this  can  be  done,  it 
gives  the  wholesaler  two  advantages  in  conducting  his  business. 
It  "ties"  his  trade  to  him,  and  it  makes  him  feel  more 
independent  in  the  matter  of  sources  than  when  he  de- 
pends on  the  makers  of  products  whose  brands  he  does  not 
control. 

When  a  wholesaler  develops  his  own  brand  its  success  puts 
the  national  advertiser  of  similar  lines  into  direct  conflict  with 
the  wholesaler  in  two  ways.  It  tends  to  reduce  the  whole- 
saler's value  as  a  distributor  of  the  manufacturer's  lines,  and  it 
makes  him  a  direct  competitor  of  the  manufacturer  in  those 
lines. 

Two  phases  of  the  wholesaler's  place  in  the  problems  of 
national  advertising  present  themselves  conspicuously  among 
the  developments  of  the  past  year.  (1)  There  has  been  some 
advance  in  the  definiteness  of  opinion  on  the  part  of  wholesalers 
in  regard  to  national  brands.  (2)  Some  new  and  successful 
methods  employed  by  national  advertisers  in  getting  the  support 
of  wholesalers. 

(1)  wholesalers'  views  of  national  and  private  brands 

H.  M.  Hughes  of  the  firm  of  Blair  &  Hughes  Co.,  wholesale 
grocers  in  Dallas,  Texas,  is  somewhat  more  favorably  inclined 
toward  nationally  advertised  brands  than  most  wholesalers  are. 
In  a  recent  contribution  to  Advertising  and  Selling  he  gives  very 

288 


THE  WHOLESALER 


289 


clearly  his  reasons  for  preferring  national  brands  to  what  are 
generally  known  as  private  brands  owned  by  wholesalers. 

*It  is  an  indisputable  fact  that  all  forms  of  deception  must 
necessarily  be  discontinued  in  merchandising  in  order  to  retain 
and  increase  trade. 

There  is  no  reason  for  the  existence  of  private  labels  unless 
those  putting  out  goods  under  private  labels  want  to  secure  a 
suflScient  distribution  to  monopolize  the  business  on  certain 
products  by  getting  them  into  consumers'  demand  and  favor 
in  order  that  they  may  eventually  raise  the  price,  making  an 
abnormal  profit.  In  case  they  cannot  make  this  profit  by 
raising  the  price  the  first  inclination  then  is  naturally  to  cut  the 
quality. 

The  manufacturing  interests,  I  have  reason  to  believe,  are 
fast  realizing  that  there  is  nothing  to  be  gained  by  packing  goods 
which  lose  their  identity  as  soon  as  they  leave  the 
factory,  and  this  is  the  case  when  they  are  put  out 
under  the  jobbers'  private  label. 

Every  manufacturer  of  importance  in  all  lines  real- 
izes that  an  established  business  in  his  products 
means  increased  business  from  year  to  year,  and  it  is 
impossible  to  establish  his  goods  unless  they  go  out  under  the 
factory's  name. 

It  is  perfectly  natural  for  a  manufacturer  who  is  manufactur- 
ing some  goods  for  his  own  label  and  some  for  private  labels 
to  put  the  best  goods  under  his  own  factory  labels,  and  there 
are  scarcely  any  goods  manufactured  that  run  uniform  at  all 
times.  This  is  especially  true  in  regard  to  canned  vegetables 
and  fruits,  for  if  the  early  crop  is  good  and  weather  conditions 
or  other  things  occur  to  damage  the  later  crop,  it  is  impossible 
to  can  as  good  an  article  out  of  the  later  crop  as  you  can  out  of 
the  earlier. 

However,  granting  that  in  a  few  isolated  cases  the  manufac- 
turers may  furnish  to  the  jobbers  for  private  labels  as  good 
quality  as  they  put  under  their  own  labels,  what  is  there  to  be 
gained  by  the  manufacturer.'^  If  a  manufacturer  packs  a  su- 
perior quality  of  goods  for  private  labels  one  year  and  the  jobber 
goes  out  and  distributes  them,  when  the  jobber  gets  ready  to 
sell  the  same  brands  another  year  he  effects  sales  on  the  quality 

*Adp6rtmng  and  Selling,  June,  1915,  p.  1£. 


Why 
Should 
Manufac- 
turers 
Ooods  Lose 
Identity  f 


200 


THE  WHOLESALER 


of  the  goods  that  the  manufacturer  has  packed  for  him  the  pre- 
vious 3'ears  and  cut  samples  out  of  this  manufacturer's  pack  to 
effect  sales.  However,  when  the  jobber  gets  ready  to  make  his 
contract,  if  this  manufacturer  will  not  make  the  price,  he  will 
place  his  business  with  some  other  manufacturer,  possibly  in  a 
section  where  nature's  provision  does  not  enable  the  growing  of 
such  commodities  as  well  as  it  does  in  the  section  in  which  the 
goods  were  formerly  packed. 

The  retailers  and  consumers  who  buy  these  goods  the  second 
year  do  not  get  value  received.  It  is  along  the  same  line  as  a 
salesman  using  a  sixteen-ounce  package  of  goods  as  a  sample  and 
shipping  a  f  ourteen-ounce.  This  would  be  considered  sharp  prac- 
tice, in  fact,  would  not  be  tolerated.  However,  this  is  no  more 
wrong  than  to  use  samples  of  the  highest  quality  and  ship  grades 
which  are  not  equal. 

The  fact  that  a  jobber  wants  to  put  goods  under  his  own  label 
is  an  open  admission  that  he  has  not  the  marketing  ability  to 
take  open  factory  brands  and  compete  with  others  in  his  line. 
I  believe  that  every  jobber  should  have  suflScient  self-confidence 
in  his  marketing  ability  to  be  willing  to  go  out  after  business 
on  open  brands  which  the  retailer  and  consumer  have  opportu- 
nity to  know  about  and  know  what  others  handling  the  same 
goods  are  getting  for  them.  This  is  the  proper  basis  on  which 
merchandise  should  be  handled  and  the  only  one  that  will  stand. 
It  has  come  under  my  observation  during  the  last  six  to  eight 
months  that  a  number  of  the  largest  and  most  reliable  manu- 
Manufae-  ^^cturers  who  have  been  packing  private  brands  have 
discontinued  them  entirely,  preferring  to  be  benefited 
with  the  retailers  and  the  consuming  trade  by  the 
superior  quaUty  of  the  goods  they  are  packing. 
I  beUeve  that  it  is  only  a  matter  of  a  short  time  imtil 
the  jobber  who  packs  private  labels  will  either  have  to  manu- 
facture his  own  goods  or  go  back  to  factory  labels,  for  it  is  im- 
possible for  a  jobber  to  divide  his  attention  between  jobbing 
and  manufacturing  and  put  up  the  quality  of  goods  that  a 
manufacturer  can  who  gives  his  time  and  attention  to  manu- 
facturing.    .     .     . 

A  number  of  jobbers  of  private  labels  have  pursued  a  cour.se 
of  going  into  certain  towns  and  cities  and  giving  the  retailer 
control  of  one  of  their  private  labels.  This  has  resulted  in  the 
retailer  trying  to  buy  everything  in  the  grocery  line  under  this 
one  label. 


turers  Dis' 
cmUinuing 
Private 
Brofuh 


THE  WHOLESALER 


291 


It  was  not  a  question  of  whether  the  packages  contained 
fourteen  or  sixteen  ounces  or  of  the  quality,  so  much  as  it  was 
that  the  products  were  under  the  jobber's  private  label  and  no 
other  retailer  could  get  it  in  the  city. 

The  consequence  was  that  the  jobber  naturally  raised  prices 
on  the  goods  from  time  to  time.  Having  given  control  of  this 
label  to  one  local  merchant,  the  jobber  was  prevented  from  solic- 
iting business  under  this  brand  from  any  other  retailer  in  that 
town,  and  the  shortage  in  volume  had  to  be  made  up  by  a  long 
profit.  The  retailer  in  question  would  feature  this  private 
brand  to  the  exclusion  of  all  other  goods,  and  when  a  manu- 
factm-er  came  along  with  another  piece  of  goods  of  better  quality 
or  lower  price,  on  which  there  was  possibly  national  advertising, 
the  retailer  would  refuse  to  buy  it,  as  he  wanted  everything 
under  the  jobber's  private  brand,  which  he  controlled. 

A  number  of  such  retailers  prospered  in  the  past,  but  investi- 
gation now  shows  that  the  better  class  of  retailers  have  discon- 
tinued this  custom  entirely  and  are  buying  open  brands  of 
goods,  which  can  be  secured  not  only  in  every  store  in  the  city 
in  which  they  are  in  business,  but  over  the  entire  United  States, 
as  their  former  action  has  stifled  comf)etition,  and  many  times 
kept  them  from  buying  goods  under  the  manufacturers'  label  at 
more  attractive  prices,  thereby  giving  the  consumers  better 
value  for  less  money. 

Another  reason  that  retailers  cannot  afford  to  buy  private 
labels  is  on  account  of  the  shifting  population  in  the  United 
States,  especially  in  the  West  and  Southwest.  Practically  every 
jobber  who  puts  out  private  labels  localizes  them  by  coining 
some  word  which  is  derived  from  cities  in  which  the  brand  is 
sold,  or  the  name  of  the  local  retail  firm.  When  a  consumer 
moves  into  a  new  section  he  buys  goods  from  a  retailer  who  is 
handling  other  localized  private  brands,  and  the  retailer  nec- 
essarily has  to  explain  each  item  to  him,  as  he  has  been  accus- 
tomed to  some  other  brands. 

If  the  dealer  were  handhng  a  manufacturer's  brand  which  was 
sold  over  the  entire  United  States,  and,  in  a  great  many  cases, 
nationally  advertised,  he  would  have  no  trouble  whatever  in 
selling  the  brands  the  consumer  wanted  and  would  not  be  forced 
to  make  substitution,  which  is  so  distasteful  to  consumers. 

As  an  example,  75  per  cent,  of  the  consumers  are  famiUar 
with  such  brands  as  Cottolene,  Welch's  Grape  Juice,  Carnation 
Milk,  Eagle  Brand  Milk,  Himt  Bros.  Quahty  Fruits,  Karo 


I 


■l 


S92 


THE  miOLESALER 


Syrup,  Quaker  Oats,  Cream  of  Wheat,  Price's  Extracts,  Price  s 
Baking  Powder,  Royal  Baking  Powder,  Snider's  Pork  and  Beans, 
Beechnut  products,  and  Spearmint  Gum.  They  will  not  question 
the  retailer  in  regard  to  quality,  as  they  have  been  accustomed 
to  buying  the  goods  wherever  they  lived. 

It  is  the  policy  of  my  owti  concern  to  adhere  strictly  to  fac 
tory  labels,  and  I  know  from  our  own  experience  that  we  arc 
gaining  ground  every  year.  We  would  like  to  see  more  jobbers 
in  the  private  label  business,  so  far  as  our  own  interests  are  con- 
cerned, because  it  enables  us  to  get  more  good  lines  under  fac- 
tory labels  and  to  sell  a  great  many  more  goods  than  we  could 
otherwise. 

Our  position  is  that  we  have  no  one  to  favor  and  will  not  stand 
behind  any  manufacturer  who  does  not  put  up  a  good  quality; 
we  are  always  free  to  handle  the  products  of  any  manufacturer 
who  can  show  us  better  goods  for  the  same  money.  This  places 
us  in  an  enviable  position  with  the  retailers  to  whom  we  sell, 
as  they  know  that  it  is  not  to  our  interest  to  stand  behind  any 
piece  of  goods  that  has  not  the  merit  of  both  price  and  quality. 

I  believe  that  the  next  ^ve  years  will  place  the  distributors  of 
factory  label  goods  in  even  a  better  position  than  they  now 
occupy,  and  I  am  glad  to  see  the  tide  change,  which  is  giving 
the  consumer  better  goods  for  less  money  under  factorj'  labels 
than  they  can  secure  under  private  labels. 

The  national  advertisers  of  well-known  brands  are,  of  course, 
positive  that  the  national  brand  is  much  sounder  in  principle 
than  any  private  brand  can  be,  and  that  wholesalers  would  do 
well  to  give  their  whole-hearted  approval  of  such  brands  rather 
than  to  undertake  to  develop  trademarks  of  their  own  under 
ordinary  circumstances.  In  an  address  before  the  National 
Wholesale  Dry  Goods  Association  in  New  York  on  January  21, 
1015,  Alvin  Hunsiker,  Vice-president  of  the  Standard  Oilcloth 
Company  of  New  York,  outlined  the  manufacturer's  position 
in  the  following  terms: 

*It  is  to  be  presumed  that  if  all  the  distribution  machinery 
was  equipped  with  anti-friction  ball-bearings  the  great  problem 
of  annually  distributing  in  this  country  the  many  million  dollars* 

^Printers'  Ink,  January  28,  1915,  p.  70. 


THE  WHOLESALER 


293 


worth  of  merchandise  would  be  simple.  There  is  greater  eflS- 
ciency  in  everything  these  days.  The  waste  in  time  and  money, 
the  lost  motion  and  extra  operations  have  been  eliminated. 
Why  should  not  the  same  principle  apply  in  the  service  that  is 
to  be  rendered  to  the  purchasing  public?     .     .     . 

Modern  merchandising  is  a  scientific  problem,  and  the  most 
successful  merchant  is  he  who  adjusts  his  business  to  the  con- 

Johhers    ditions  that  confront  him  from  day  to  day.     Time 

And      brings  its  changes,  and  men  conducting  business  must 

Advertised  recognize  the  modern  factors  that  are  entering  into 

Brands  ^^  conduct  of  business.  The  wonderful  growth  of 
advertising  must  be  taken  into  consideration.  This  is  a  day  of 
large  business  and  large  advertising  appropriations.  Advertis- 
ing is  an  investment,  not  an  exp)ense.  The  essence  of  success 
in  the  manufacturing  business  is  production.  In  a  fairly  large 
business  an  increase  of  10  per  cent,  in  production  will  take  care 
of  a  large  advertising  appropriation,  whereas  a  large  advertising 
appropriation  usually  adds  from  25  to  50  per  cent,  increase  in 
production.  The  advertising  appropriation,  even  a  large  one, 
therefore,  eventually  results  in  lowering,  not  increasing,  costs. 
This  problem  has  been  so  satisfactorily  proven  that  many  con- 
cerns have  become  national  advertisers  to  great  advantage  w4th 
regard  to  their  cost  sheets. 

Every  reputable  manufacturer  these  days  trademarks  his 
goods  and  guarantees  the  quality.  He  takes  pride  in  his  prod- 
uct and  educates  the  trade  to  the  merits  of  his  goods  and  en- 
deavors, as  far  as  possible,  to  standardize  his  selling  prices. 

It  is  obvious,  if  a  dealer  is  convinced  through  the  still-hunt 
salesman,  advertising,  that  a  certain  article  has  merit  and  is  the 
best  for  him  to  sell  that  he  naturally  wants  to  know  where  he 
can  secure  it.  For  this  reason  it  would  appear  that  if  the  whole- 
saler who  wants  to  increase  his  business  would  advertise  the  fact 
that  he  carries  a  full  line  of  nationally  advertised  articles,  nam- 
ing them  in  turn,  and  that  he  renders  exceptionally  good  service, 
he  would  be  Unking  together  a  pulling  proposition — the  pro- 
ducer's ready-made  demand  and  the  wholesaler's  easily  dis- 
tributed supply.  After  all,  the  supply  and  the  demand  is  the 
answer  to  all  merchandising  projx)sitions. 

Occasionally  a  wholesaler  may  be  found  who  does  not  handle 
articles  of  merchandise,  well  advertised,  and  sold  to  the  trade  at 
a  uniform  price.  He  reasons  that  he  can  do  better  by  purchasing 
other  lines  at  less  money  and  sell  them  at  or  near  the  estab- 


294 


THE  WHOLESALER 


lished  price  of  the  advertised  line.  This  sort  of  merchant  for- 
gets that  in  every  industry  usually  some  one  particular  line 
fixes  the  standard  and  becomes,  so  to  speak,  the  governor  for 
that  industry.  It  steadies  the  market,  keeps  the  average  price 
more  nearly  on  a  level  during  extreme  fluctuations  in  the  raw 
material  market.  It  sets  the  pace  in  style  and  in  quality.  It 
is,  in  fact,  the  barometer  for  the  trade.  The  merchant  who 
religiously,  persistently,  and  with  premeditated  forethought  re- 
fuses to  purchase  quality  lines  and  sells  less  desirable  and  less 
dependable  ones  at  the  quality  line  price  does  not  seem  to  realize 
that  if  his  line  of  action  was  followed  by  many  wholesalers  it 
would  result  in  "killing  the  goose  that  lays  the  golden  egg,** 
for  the  established  selling-price  plan  contemplates  the  co-opera- 
tion of  the  producer  and  the  distributor. 

An  article  of  acknowledged  merit,  well  advertised  and  uni- 
formly sold,  should  not  be  expected  to  serve  as  an  umbrella 
for  less  desirable  lines.  Every  article  should  be  sold  on  its 
merit,  and  the  selling  price  should  be  regulated  accordingly. 
A  wholesaler  who  operates  in  any  other  way  will  lose  out  in  the 
end. 

The  established  or  fixed  selling-price  plan,  which  a  few  years 
ago  was  fro\^Tied  upon,  especially  by  the  political  demagogue, 

Jof)her»  ^s  suddenly,  in  these  hard  times,  becoming  popular. 
Wfui      We  predict  it  will  soon  be  legalized  and  firmly  estab- 

Paddle  Hshed,  for  it  is  not  only  the  safest  but  by  far  the  wisest 
^  Ijpttream  p^jjcy  to  pursue  if  business  methods  and  business  prof- 
its are  to  be  standardized  and  merchants  are  to  operate  on  sen- 
sible and  sound  business  principles. 

Some  wholesalers  also  refuse  to  push  trademarked  goods  on 
the  ground  that,  instead  of  helping  themselves,  they  are  helping 
the  trademarked  goods.  The  man  who  is  incUned  to  paddle 
against  the  stream  instead  of  running  with  the  current  is  very- 
apt  to  reason  this  way.  He  would,  on  account  of  his  peculiar 
point  of  view,  rather  sell  $1,000  worth  of  unadvertised  goods  with 
great  effort  and  perchance  a  little  more  profit  than  to  sell  $10,000 
worth  of  well-advertised  goods  with  much  less  effort  and  a  regu- 
larly guaranteed,  and,  by  virtue  of  the  larger  sales,  a  greatly 
increased  profit.  He  is  ignoring  the  old  law  of  supply  and  de- 
mand. He  is  probably  losing  time  and  wasting  the  patience 
of  his  customers  in  trying  to  convince  them  that  he  has  some- 
thing "just  as  good"  when  they  ask  for  the  advertised  and  well- 
known  article.    The  dealer  who  reads  convincing  advertise- 


THE  WHOLESALER 


295 


ments  week  in  and  week  out,  year  in  and  year  out,  advertising  a 
reputable  article,  is  not  fooled  by  unwise  merchandising  meth- 
ods. The  wholesaler  who  tries  to  fight  against  well-directed 
advertising  instead  of  tying  fast  to  it  by  securing  the  advantage 
that  it  wiU  bring  to  him  in  the  increase  of  his  business  is  not 
working  along  the  line  of  least  resistance,  but  is  paddling  against 
the  stream.  The  wise  wholesaler  will  follow  the  currents  of 
modern  business  and  not  buck  against  them.  He  is  up  against 
a  condition  and  not  a  theory. 

Some  wholesalers  have  their  own  trademarks,  thereby  ad- 
mitting that  the  principle  of  trademarking  is  correct.  The 
difficulty  and  risk  of  a  wholesaler  standing  behind  his  own  trade- 
mark on  goods  manufactured  by  some  one  else  is  necessarily 
great.  As  he  changes  from  one  manufacturer  to  another,  he  is 
changing  from  one  grade  to  another,  and  this  is  always  dan- 
gerous, for  in  the  case  of  inferior  style  or  quality  he  is  hurting  his 
own  reputation  and  not  the  reputation  of  the  manufacturer 
who  is  entitled  to  be  hurt.  In  the  case  of  poor  quality  it  is 
mucli  easier  to  adjust  claims  under  the  manufacturer's  guarantee 
than  under  his  own.     .     .     . 

One  of  the  greatest  stumbling-blocks  in  the  way  of  a  more 
perfect  distribution  of  merchandise  is  the  absence  of  a  fixed 
policy.  Some  manufacturers,  for  instance,  are  utterly  at  sea 
with  regard  to  a  proi>er  selling  plan.  Instead  of  a  capable  and 
long-headed  executive  fixing  the  selling  policy,  it  is  often  left 
to  the  judgment  of  a  salesman  on  the  road,  who,  no  matter  how 
energetic  and  painstaking  he  may  be,  often  lacks  the  discretion 
that  is  necessary.  He,  therefore,  meets  conditions  as  he  finds 
them,  and  in  many,  if  not  all  instances,  sells  his  product  at 
varying  prices  and  on  fluctuating  terms.  If  salesmen  of  the 
same  manufacturer  on  other  territories  operate  on  the  same  plan 
it  is  obvious  that  the  selling  plan  of  such  a  manufacturer  is  like 
a  moth-eaten  garment.  A  selling  policy  of  such  a  nature  is  un- 
skilful, unwise,  unfair,  and  ruinous  in  the  end.  On  the  other 
hand,  some  wholesalers  have  no  fixed  policy,  but  permit  the 
head  of  each  department  to  fix  his  own  policy.  This  plan  per- 
mits of  as  many  different  policies  in  some  wholesale  businesses 
as  there  are  departments.  As  heads  of  departments  frequently 
change,  the  policy  of  that  department  changes. 

The  trained  executive  frequently  takes  no  part  in  fixing  the 
policy  of  the  departments  under  him,  except  to  hold  the  head  of 
each  department  to  strict  account  for  a  good  showing.    In  this 


296 


THE  WHOLESALER 


i« 


way  department  buyers  very  frequently  are  compelled  to  figure 
for  one  season  only,  instead  of  for  the  long  pull.  They  do  not 
work  along  the  Ime  of  the  "best  for  the  long  run."  They  have 
no  definite  policy  for  building  up  a  business  that  will  grow  from 
season  to  season.  They  have  but  one  idea  and  that  is  the  profit 
they  can  make  for  this  particular  season. 

This  sort  of  policy  results  in  switching  from  one  line  to  another. 
If  the  necessities  of  one  manufacturer  compel  him  to  sell  his 
product  some  season  under  the  average  price  of  other  manufac- 
turers, the  buyer  jumps  in,  throws  out  the  line  that  he  has  been 
running  for  some  years,  and  puts  in  the  new  line  for  the  purpose 
of  temporarily  making  a  few  additional  dollars.  Such  a  buyer 
is  tampering  with  the  good  will  of  his  firm  and  very  likely  is  serv- 
ing its  customers  with  an  article,  they  have  not  been  accustomed 
to  receive,  an  article  they  do  not  want,  and  an  article  which  they 
take  temporarily  in  protest.  Sooner  or  later  a  dissatisfied  cus- 
tomer will  go  to  a  house  where  he  receives  what  he  wants  and 
what  he  is  accustomed  to  receive.  ^     , 

The  plan  of  having  leaders  to  attract  trade  is  wrong  in  princi- 
ple, for,  if  carried  to  its  last  analysis,  it  must  be  apparent  that  if 
each  large  wholesale  house  had  three  or  four  leaders  it  would 
not  be  long  before  most  everything  wholesalers  sold  would  be 
leaders  and  the  profit  on  the  entire  business  would  disappear 

entirely.     ...  •  j  i. 

The  live  wholesaler  who  preserves  his  own  reputation  and  that 

of  his  trade  and  who  renders  real  service  must  have  a  positive,  a 

regular,  and  a  dependable  source  of  supply.     Some  one 

The  Price-  has  said  **90  per  cent,  of  the  success  in  business  is 

Vf^.  5"  service."    The  price-cutting  manufacturer  is  an  un- 

Rdi^n^  certain  quantity.  He  is  dependable  only  for  a  short 
period  of  time.  The  price-cutter  usually  postal  cards 
more  than  he  sells.  He  is  a  grand-stand  player.  His  methods 
are  like  the  devil  shearing  the  pig— more  noise  than  wool. 

It  should  require  no  great  business  judgment  to  definitely  de- 
termine that  to  cater  to  the  multitudinous  wants  of  practically 
200,000  department  stores  and  dealers  in  this  country,  75  per 
cent,  of  which  are  general  stores,  that  the  services  of  the  whole- 
saler are  necessary.  It  naturally  follows  that  the  wholesaler 
who  has  the  best  organization,  who  sells  the  goods  that  sell  in  the 
largest  quantity,  with  the  least  seUing  effort,  who  renders  good 
and  especially  quick  service,  who  carries  live  stocks,  who  sells  at 
It  fair  price;  who  reduces  his  expenses  to  the  minimum,  and  who 


THE  WHOLESALER 


297 


has  an  ever-increasing  volume  of  business  with  a  profit  attach- 
ment, is  on  the  map  to  stay.  The  same  arguments  apply  equally 
as  well  to  a  manufacturer  who  operates  on  the  same  plan.  The 
firms  who  have  failed  usually  have  operated  under  business 
methods  that  were  antiquated  and  unscientific.  They  probably 
belong  to  the  old  school.  It  is  safer  to  beat  your  competitor 
with  brains  rather  than  with  merchandise  sold  at  a  loss.  The 
suspense  account  of  many  unwise  merchandisers  would  pay  their 
dividends  for  years. 

Business  has  been  passing  through  a  period  of  liquidation  and 
fundamentally  is  on  a  sound  basis  to-day.  Some  time  in  the 
near  future  business  will  be  very  much  better,  but  this  big  busi- 
ness, however,  is  going  to  be  secured  by  big  business  men — men 
who  are  broad-gauged;  men  who  will  not  stoop  to  little  petty 
methods  in  conducting  business;  men  who  will  co-operate  with 
each  other  and  thereby  place  the  foundation  of  this  country's 
business  on  a  basis  that  will  cause  it  to  expand  and  grow.  There 
will  be  no  place  for  the  little  man,  be  he  producer  or  wholesaler, 
who  will  grasp  at  a  dollar  now  and  lose  a  hundred  later  on. 

Among  the  most  notable  successes  of  private  brand  develop- 
ment by  wholesalers  is  that  of  the  "Keen  Kutter"  trademark, 
which  is  owned  by  the  Simmons  Hardware  Company  of  St. 
Louis.  The  "Keen  Kutter"  business  has  grown  to  be  so  large 
that  the  Simmons  Company  has  in  some  cases  obtained  a  con- 
trolling interest  in  manufacturing  establishments,  and  has  in  this 
sense  become  an  actual  producer  of  nationally  advertised  goods. 
In  connection  with  the  meeting  of  the  Pennsylvania  Retail 
Hardware  Association  in  Philadelphia  in  the  early  part  of  1914 
the  Simmons  Hardware  Company  had  a  **Keen  Kutter"  display 
which  supplied  some  interesting  side  lines  upon  some  of  the  ad- 
vertising methods  of  the  company.  Printers*  Ink,  in  writing 
of  this  exhibition,  says,  in  its  issue  of  February  26,  1914: 

The  feature  of  this  display  was  a  long  roll  of  advertisements 
cut  from  magazines  and  newspapers  by  the  children  of  Hillsboro, 
la.  Hillsboro  is  a  town  of  325  population.  The  Simmons 
Hardware  Company  offered  a  prize  to  the  boy  or  girl  who  could 
collect  the  largest  number  of  advertisements  printed  by  that 


SOS 


THE  WHOLESALER 


company  in  the  magazines  and  newspapers  of  the  country.  The 
result  was  that  1,150  advertisements  were  turned  in.  The  larg- 
est number  of  these  advertisements  were  submitted  by  an 
eight-year-old  boy,  who  received  a  chest  of  first-class  tools  as 
compensation.  The  advertisements  were  pasted  together  and 
were  on  exhibition  at  the  hardware  show. 

J.  A.  Carroll,  of  the  "Keen  Kutter**  company,  stated  that 
prior  to  1905  the  firm  had  only  Western  offices.  In  that  year 
an  advertising  campaign  was  started  and  it  was  found  necessarj' 
not  only  to  open  Eastern  stores,  but  manufacturing  depots  as 
well.  He  stated  that  Philadelphia  was  now  the  second  city  in 
the  amount  of  "Keen  Kutter"  business  being  done,  St.  Louis 
being  the  first.  Mr.  Carroll  declared  that  one  of  the  greatest 
fallacies  the  public  labors  under  is  that  the  cost  of  advertising 
is  charged  up  against  the  goods  sold  to  consumers.  He  said  that 
it  would  be  quite  impossible  to  distribute  equitably  the  money 
expended  for  publicity,  there  being  79,000  patterns  of  goods 
bearing  the  "Keen  Kutter"  brand,  which  were  sufficient  to 
necessitate  bringing  the  increase  for  ad  purposes  down  to  a  mill 
or  fraction  of  a  mill  on  each  article  sold. 

Mr.  Carroll  declared  that  a  $3,000,000  business  was  done  in 
Philadelphia  last  year,  and  that  the  increase  directly  due  to 
advertising  was  35  per  cent,  last  month.  "We  have  found," 
said  Mr.  Carroll,  "that  the  man  who  advertises  has  the  people 
with  him.  Ads  make  immediate  markets  for  goods.  This  was 
why  we  were  forced  to  establish  branches  in  the  East  in  order 
to  meet  trade  increase  that  our  campaign  brought  us." 

(2)  NATIONAL  ADVERTISERS*  PLANS  FOR  SECURING  THE  WHOLE- 
SALERS*  SUPPORT 

Several  months  ago  a  manufacturer  appealed  to  Printers^  Ink 
for  information  as  to  how  advertisers  secured  the  active  co-opera- 
tion of  wholesalers.  He  reported  that  he  had  tried  all  sorts  of 
arguments  and  various  methods,  including  the  sending  of 
letters  to  the  wholesalers*  salesmen,  and  that  his  results  had 
been  very  unsatisfactory.  Printers^  Ink  put  the  question 
to  a  manufacturer  who  has  been  particularly  successful  in 
securing  the  co-operation  of  the  wholesalers,  and  the  following 
article  resulted: 


THE  WHOLESALER 


299 


*This  question  is  put  to  me:  "Do  you  believe  in  jobber  co- 
operation?' 

My  reply  is:  It  depends  upon  the  goods.  If  the  line  runs 
into  money  rapidly,  work  on  the  jobber  can  be  made  to  pay. 
If  the  average  sale  per  retailer  is  small,  don't  devote  much  time 
and  effort  in  securing  the  jobber's  co-operation,  because  jobber 
co-operation  can  be  successful  only  to  the  extent  that  working 
together  affects  the  self-interest  of  the  jobber.  You  had  better 
turn  your  attention  to  consumer  demand  and  to  the  retailer. 

Twelve  years  as  salesman  and  fifteen  as  an  advertising  man 
have  taught  me  that  the  consumer,  the  retailer,  and  the  jobber 
respond  more  readily  to  an  appeal  that  has  self-interest  as  a 
basis,  and  the  closer  you  stick  to  this  policy  the  more  certain  is 
success. 

Take  my  own  line  for  example.  The  goods  retail  for  50  cents. 
The  annual  sale  per  retailer  will  average  two  or  three  dozen. 
Our  output  is  enormous  because  we  have  a  distribution  of  be- 
tween 85  per  cent,  and  90  per  cent.  This  would  seem  to  be  an 
attractive  proposition  to  the  jobber.  But  let  us  dig  under  the 
surface  and  look  at  it  from  the  jobber's  point  of  view. 

In  selling  through  the  jobber,  we  have  three  factors  to  deal 
with:  the  policy  of  the  jobber,  the  buyer,  and  the  salesman. 

It  must  be  remembered  that  in  spite  of  the  fact  that  the  jobber 
must  recognize  the  power  of  advertising,  there  are  still  many  of 
them  who  are  not  favorable  to  advertised  lines.  They  wish  to 
control  their  lines  or  brands.  They  object  to  being  told  where 
and  how  they  shall  sell  the  goods.  Some  jobbers  will  not  voice 
their  objections,  but  the  scarcity  of  advertised  lines  in  their 
stocks  is  sufficient  evidence  of  their  attitude.  Others  come  out 
into  the  open,  as,  for  example,  a  jobbing  house  which  within  a 
week  cancelled  an  order  given  one  of  our  salesmen.  The  letter 
said,  "  We  have  decided  that  we  will  not  handle  advertised  goods 
of  any  kind." 

Other  jobbers  have  private  brands  which  the  salesmen  are 
instructed  to  push  and  to  substitute  wherever  they  can. 

Still  others  carry  our  line  because  there  is  an  insistent  demand. 
They  know  that  orders  for  other  goods  almost  invariably  go 
with  orders  for  ours.  These  jobbers  do  not  want  their  customers 
to  go  to  a  competitor,  consequently  they  stock  our  goods,  but 
the  salesmen  do  not  push  them,  never  offer  them,  never  ask  for 

*Printeri  Ink,  January  15,  1014.  p.  82. 


300 


THE  WHOLESALER 


orders  for  them,  and  will  not  carry  our  sample  cards.  If  a  cus- 
tomer asks  for  our  goods  the  salesman  will  book  his  order,  but 
that's  as  far  as  he  will  go.  He  makes  it  a  policy  to  follow  the 
policy  of  the  house. 

Now  take  the  buyer's  view.  His  standing  with  his  house 
depends  upon  volume  of  sales  and  profits.  He  favors  goods  that 
run  into  money  rapidly  and  pile  up  his  gross  sales.  An  increase 
in  his  department  means  an  opening  to  ask  for  more  pay.  No 
matter  how  loyal  and  conscientious  he  may  be  to  his  house  he 
has  both  eyes  wide  open  for  Number  One. 

The  salesman's  interest  is  along  the  same  line  as  the  buyer's. 
Gross  sales  count  with  him.  He  wants  his  sales  to  show  an 
increase  each  year  because  his  income  is  based  on  volume  of  sales. 

It  is  unreasonable  to  expect  the  buyer  to  interest  himself  in 
pushing  articles  that  swell  sales  by  inches.  It  is  just  as  unrea- 
sonable to  expect  a  salesman  to  spend  his  time  selling  eight  or 
ten  dollars'  worth  of  our  goods  when  in  the  same  time  he  can 
book  an  order  for  fifty  or  one  hundred  dollars'  worth  of  shirts  or 
underwear. 

fft^  You  wouldn't  do  it,  neither  would  I,  so  we  must  not 

Demands  lose  sight  of  the  personal  equation  and  expect  results 

qf  Self-    from  these  men  unless  it  is  tor  their  advantage  or  ad- 

tnterest    yancement  to  push  the  goods. 

Let  me  give  you  three  concrete  examples  of  how  great  a  part 
self-interest  plays  in  the  selling  game. 

A  manufacturer  ofiFered  a  valuable  prize  to  every  salesman  who 
sold  fifty  dozen  of  his  product.  His  sales  increased  rapidly  up 
to  a  certain  point — a  point  about  equal  to  an  average  sale  of 
fifty  dozen  per  salesman. 

To  further  increase  his  sales  he  o£Fered  a  more  valuable  prize  to 
each  man  selling  one  hundred  dozen.  Again  his  sales  took  a 
jump,  but  not  as  fast  as  before.  It  was  easy  for  the  average  man 
to  sell  fifty  dozen,  only  the  top  notcher  could  reach  one  hundred, 
and  right  here  the  jobber  stepped  in  and  objected  to  having  his 
salesmen  subsidized  by  the  manufacturer. 

To  get  the  interest  of  the  buyers  a  manufacturer  a  year  or  two 
ago  offered  an  unusually  valuable  premium  to  the  buyer  who 
showed  the  largest  increase  in  sales  of  the  manufacturer's  goods 
as  compared  with  sales  of  the  previous  year.  It  worked  well, 
and  the  increase  in  sales  paid  a  fine  profit  above  the  cost  of  the 
premium. 

You  can  interest  the  jobber  by  offering  extra  discounts  on 


THE  WHOLESALER 


,W1 


quantities,  an  extra  case  of  goods  with  a  ten-case  order,  rebates  if 
he  will  sell  a  certain  quantity  within  a  year,  and  by  other  stunts 
that  put  more  dollars  in  his  pocket. 

I  simply  offer  these  examples  to  show  that  the  word  co-opera- 
tion is  a  misnomer.     Self-interest  is  the  correct  term. 

There  is  no  fault  without  its  remedy.  This  article  would  be 
incomplete  if  an  outline  of  how  to  counteract  the  jobber's  lack  of 
interest  were  omitted. 

When  a  doctor  treats  a  patient  for  debility  he  begins  by  giving 

stimulants.     The  best  tonic  for  the  jobber  is  orders.     Repeat 

orders  for  goods  will  wake  up  the  most  indifferent 

rnZ.iL  i«^ber-    They  prove  the  demand.     They  are  tangible 

Coumerad  evidence  that  cannot  be  passed  up. 

Jobber's  To  bring  repeat  orders  the  interest  of  the  retailer 
Selfishness  must  be  enlisted.  It's  much  easier  to  get  the  dealer 
to  push  a  line.  He  is  an  entirely  different  proposition 
from  the  jobber.  He  is  susceptible  to  suggestions  to  push  our 
line.  He  knows  better  than  any  jobber  what  it  means  to  handle 
a  live  line  of  extensively  advertised  goods.  He  knows  that 
advertising  pays  because  he  sees  the  proof  every  day  in  the  de- 
mand of  his  customers  for  advertised  goods.  He  sees  it  in  the 
people  he  gets  into  his  store  through  his  own  local  advertising. 
No  need  to  tell  him  how  he  benefits.  There  is  no  more  argument 
in  his  mind  against  advertising  than  there  is  against  fire  insur- 
ance. In  fact,  I  believe  the  dealer  has  been  the  prime  mover  in 
actually  starting  many  manufacturers  to  advertise  through  in- 
sisting that  a  demand  for  the  goods  be  created. 

I  asked  a  retailer  a  few  days  ago  whether  he  favored  unadver- 
tised  goods  paying  a  large  profit  or  advertised  lines  paying  a 
smaller  profit. 

His  reply  was :  *T  will  answer  your  question  by  telling  you  of  an 
incident  that  happened  in  my  store.  I  carry  a  certain  line  of 
advertised  underwear.  It  costs  me  $4.25  per  dozen.  It  is  as 
good  as  gold,  the  demand  is  steady.  When  I  stock  ten  dozen 
of  the  line  I  know  absolutely  that  I  will  sell  every  suit.  I  know 
about  how  long  the  stock  will  last,  how  many  times  I  can  turn 
over  the  money  invested  in  it.  I  can  figure  within  $10  of  how 
much  profit  I  will  make  on  this  underwear  during  the  year. 

"  A  few  months  ago  I  bought  a  stock  from  another  maker.  In 
my  opinion,  it  is  just  as  good  value  as  the  line  I've  just  mentioned. 
It  is  made  by  a  thoroughly  reliable  house,  but  it  doesn't  adver- 
tise.    I  bought  because  the  price  was  fifty  cents  per  dozen  less. 


so? 


THE  WHOLESALER 


-\f 


t 


|iJ 


"When  showing  this  underwear  to  my  customers  I  guaranteed 
it  to  be  just  as  good  as  the  other  Hne.  Some  customers  bought  it 
and  I  never  had  a  complaint,  but  most  of  them  would  say,  *I 
guess  I  will  take  the  brand  I  know  by  name.* 

'*I  finally  sold  the  stock,  but  it  took  a  long  time  to  do  it,  and 
every  sale  took  time  and  talk.  My  conclusion  is  that  it  may  not 
take  good  salesmanship  to  sell  advertised  goods,  but  it's  a  mighty 
sight  more  profitable  and  better  business  to  follow  the  line  of 
least  resistance  and  sell  my  customers  what  they  ask  for." 

Just  as  he  finished  telling  me  his  story,  a  man  came  in  hur- 
riedly. "Wrap  up  a  suit  of  Blank  underwear  (naming  the  ad- 
vertised line  we  had  been  discussing),  size  38,"  he  said,  and  was 
gone.  My  friend  smiled  and  remarked,  "Didn't  cost  much  tc 
make  that  sale.  I  make  dozens  of  just  such  quick  sales  on  ad- 
vertised goods." 

This  retailer  is,  I  believe,  a  fair  sample  of  the  country  and 
small-town  retailer.  He  is  fine  timber  for  the  manufacturer  to 
work  on  who  seeks  co-operation. 

Interest  the  retailer  in  your  goods  and  he  will  do  more  toward 
putting  the  jobbers'  names  on  your  books  than  all  the  talking, 
writing,  or  persuasion  you  can  bring  to  bear.  Orders  talk  to  the 
jobber  in  a  language  he  understands. 

While  the  retailer  will  give  more  real  practical  co-operation 
than  the  jobber,  you  have  two  factions  to  consider,  the  retailer 
himself  and  his  clerks.  If  you  can  interest  the  clerk  in  your 
product  you  will  make  rapid  strides  to  increased  sales.  It  is  the 
clerk  who  is  the  last  link  in  the  chain  between  factory  and  con- 
sumer. It's  the  clerk  who  actually  passes  your  goods  to  the 
consumer.  It  is  just  as  easy  for  the  clerk  to  knock  your  line  as 
to  boost  it.  He  is  actually  in  a  position  to  hinder  or  quicken 
your  sales. 

Take,  for  example,  the  clerks  in  stores  like  Riker's,  of  Boston 
and  New  York.  This  concern  cuts  prices  on  proprietary  medi- 
cines and  trademarked  toilet  articles  to  draw  trade. 

On  nearly  every  article  it  has  something  similar  under  its  own 
brand  on  which  it  makes  a  good  profit. 

The  clerks  are  specially  instructed  to  sell  the  goods  made 
by  the  house  if  possible.  The  policy  is,  push  our  goods  to  the 
limit,  sell  the  other  fellow's  only  if  you  have  to. 

Riker's  must  pay  good  dividends  for  they  are  constantly  add- 
ing new  stores.  I'm  pretty  sure  they  don't  make  their  profit 
on  the  cut-price  goods.     It  must  be  admitted  that  the  Riker 


THE  WHOLESALER  303 

preparations  are  usuaUy  just  as  good  and  effective  as  the  articles 
they  imitate,  and  they  back  their  goods  with  a  clean-cut  guaran- 
tee  of  money  back  if  not  satisfied.  Riker's  is  an  example  of  how 
much  ice  the  clerk  cuts  in  a  customer's  final  decision  on  what  he 
wants  to  buy. 

Another  point  about  the  clerk  is  this.  It  is  human  nature  to 
recommend  an  article  that  one  personally  uses  or  wears.  The 
clerk  is  no  exception  and  many  an  article  has  a  large  sale  in  some 
st<^s  because  the  clerks  use  it  themselves. 

We  have  got  a  long  way  from  the  jobber  in  this  article.  I  had 
to  ring  in  the  retailer  and  his  clerk  to  show  jobber  co-operation, 
provided  you  get  it.  may  be  of  the  least  importance 

Remember.  It  is  the  clerk  who  makes  the  real  sale,  the  sale  that 
takes  the  goods  oflF  the  shelf  and  rings  down  the  curtam,  for  an 
article  is  never  actuaUy  sold  until  it  is  in  the  possession  of  the 
consumer. 

In  my  opinion  the  jobber  is  simply  a  distributor.     He  is  a 

helpful  factor  m  many  Imes.     That  he  is  not  always  an  absolutely 

Price  U   necessary  cog  in  the  wheels  of  many  lines  of  trade  is 

t  jZ^f  ^^Tr  ^V^^  hundreds  of  manufacturers  who  seU  di- 

Tai;  ^    ^J  ^"^  ^^I"  i:?^'K  ^''^  ^"^1^  enormous  businesses, 
lake  the  collar  and  shut  industries,  for  example. 

Cultivate  the  jobber  as  a  distributor.     Gain  his  good  will  bv 

showing  what  there  is  m  it  for  him.     Put  your  coK)pSrative  work 

on  the  retailer  and  his  clerks.     But  before  aU  else  get  the  con- 

worry  but  that  the  retailer  wiU  buy  from  the  jobber  to  supply  the 
demand  and  the  jobber  will  come  to  you  for  the  goods. 

*or  in  spite  of  the  middlemen  that  stand  between  you  and  the 
final  sale,  don  t  forget  the  consumer  is  the  last  word 

,-ni  f]?^  ^uu  '^u  ""^^^^  ^^^^^^^  ^^"  ^«t  interpret  it  as  knock- 
mg  the  jobber  That  is  furthest  from  my  thoughts.  The  job- 
ber IS  a  helpful  medium  m  the  distribution  of  goods.  He  earns 
h^s  profits  deservedly,  and  gives  in  exchange  convenient  and  weU- 
scattered  points  of  distribution  that  facilitate  the  quick  delivery 
of  merchandise.     His  men  visit  every  town  and  every  dealer  in 

n^f.u  ""ff  "^^  towns  so  smaU  that  no  manufacturer  of  a  single  line 
co^d  aflPord  to  send  his  salesmen  to  them. 

But  you  must  not  expect  him  nor  his  selling  organization  to  do 
unreasonable  things.  You  must  not  hope  to  gain  his  co-opera- 
tion  unless  you  can  show  him  absolutely  that  there  is  mon^  in 
It  for  him-^nough  money  to  appeal  to  his  self-interest 


S04 


THE  WHOLESALER 


One  of  the  methods  for  securing  the  support  of  the  wholesaler 
which  has  been  most  frequently  tried  and  which,  on  principle, 
seems  to  offer  as  good  a  chance  for  success  as  any,  provided  it  is 
properiy  done,  is  to  stimulate  consumer  demand  of  the  right 
kind.  W.  W.  Garrison  reports  in  the  following  article  the  meth- 
ods employed  by  three  national  advertisers  in  bringing  this 
about: 

♦Passing  along  Lake  Street,  Chicago,  on  the  Oak  Park  Elevated 
Railroad,  you  can  see  a  little  one-story  machine  shop.  It  isn't 
visible  from  the  street  level  because  it  is  screened  by  another 
frame  building  on  the  front  of  the  same  lot. 

This  was  four  years  ago.  Since  then  a  large  national  business 
has  grown  out  of  the  back-lot  machine  shop  through  a  change  of 
products  from  one  that  was  sold  to  manufacturing  concerns  to 
one  sold  to  the  consumer  masses — ^and  the  addition  of  national 
advertising. 

The  machine-shop  proprietor  was  netting  about  $20  a  week. 
He  hit  on  a  machinery  idea  that  had  possibilities.  A  patent  was 
secured.  The  product,  however,  was  not  one  that  appealed  to  a 
large  class  of  trade.     Its  market  was  tiny. 

The  field  of  goods  into  which  the  invention  fitted  was  dom- 
inated by  two  great  companies  which  did  95  per  cent,  of 
the  business.  Two  friends  and  a  few  hundred  dollars  were 
interested  in  the  invention.  The  business  was  a  hand-to-mouth 
proposition.  They  built  the  product  as  buyers  paid  their  bills. 
On  two  occasions  efforts  to  steal  the  invention  were  made. 

The  machine-shop  proprietor  happened  to  be  a  native  of  a 
small  Iowa  town,  and  in  the  course  of  time  he  succeeded  in  in- 
teresting some  money  there  in  the  business.  He  secured 
$10,000  upon  the  stipulation  that  he  move  the  business  to  the 
Iowa  town. 

At  the  end  of  a  year  there  the  product  showed  a  book  profit. 
There  were  no  dividends.  Competition  in  the  field  occupied  by 
the  product  precluded  any  monumental  success.  The  big  stick 
of  competition  seemed  to  have  just  about  marked  out  a  certain 
distance  that  small  fry  could  go,  and  there  sales  stopped. 

But  finally,  out  of  the  original  idea,  the  machine-shop  proprie- 
tor evolved  an  article  that  had  for  its  market  the  masses  rather 


•Pnirfw*'  Ink,  February  18,  1915,  p.  84. 


THE  WHOLESALER 


SOo 


than  the  restricted  field  of  manufacturers.  To  the  inventor  it 
looked  salable.  But  the  financing  parties  laughed  at  it  because 
of  the  peculiarities  of  its  construction,  even  though  it  did  have  a 
function  in  almost  any  home  and  filled  what  was  believed  to  be  a 
real  want. 

"Stick  to  the  original  goods,"  the  stockholders  said.  "Fight 
it  out  on  that  basis.'* 

But  as  a  test,  the  inventor  made  up  a  model  and  went  to  a  big 
New  York  jobber,  who  by  reputation  is  the  oracle  in  his  line. 
He,  too,  laughed  at  the  goods.  "  They  won*t  buy  that,"  he  said. 
"We'd  be  idiots  if  we  took  a  chance  by  stocking  any  of  them." 

In  spite  of  this  turn-down — and  while  the  original  product  was 
being  made — the  inventor  worked  out  the  copy  for  a  small  leaflet. 
He  spent  $25  getting  the  cuts  made  and  the  printing  done.  It 
described  the  goods,  painted  the  picture  of  the  possible  sale. 

He  mailed  it  to  a  number  of  dealers.  There  was  some  re- 
sponse, a  few  sample  orders  which  were  filled  through  jobbers 

Changing  the  dealers  named,  in  spite  of  the  apparent  attitude 

the  Jobber's  of  that  avenue  of  trade.    This  little  encouragement 

Mind     stimulated  the  stockholders  into  the  expenditure  of  a 

little  over  $100  for  an  advertisement  in  one  national  medium. 

The  ad  brought  back  $165  in  cash  and  a  few  over  one  hundred 
inquiries. 

One  of  the  more  imaginative  stockholders  saw  possibilities  in 
those  results.  In  another  business  he  had  been  a  small  national 
advertiser.  "Get  into  big  space  with  this.  These  results, 
though  secured  on  a  tiny  scale,  prove  beyond  question  the  sala- 
bility  of  the  goods.  Then  get  the  dealers  and  jobbers  as  quick 
as  demand  is  evidenced." 

The  factory  then  was  a  two-story  building  of  50  feet  wide  and 
150  feet  deep.     At  that  time  that  was  ample  space. 

The  recommendation  of  advertising  counsel  was  for  fair-sized 
space  in  mediums  which  could  be  used  with  the  appropriation 
allowed  by  the  stockholders. 

A  letter  that  purported  to  be  semi-confidential  was  written  to 
the  jobbers  informing  them  of  the  decision  to  create  consumer 
demand  by  the  use  of  copy  in  national  media.  They  were  told 
of  the  article,  the  uses  and  how  it  had  been  refined.  The  picture 
of  demand  was  impressed  upon  their  minds.  A  leaflet  accom- 
panied the  letter. 

Jobbers  were  apathetic.     No  orders  came. 

Then  a  circular  was  prepared  for  dealers.    National  ads  were 


! 


i: 


li 


806 


THE  WHOLESALER 


reproduced.  It  was  a  simple  affair.  Space  was  left  for  the 
jobbers*  names.  The  post-ofBce  address  of  the  company  was 
omitted.  It  was  ostensibly  a  circular  printed  by  the  job- 
ber. . 

Jobbers  were  asked  the  number  of  names  of  dealers  on  their 
mailing  lists.  This  number  was  printed  with  the  jobbers*  names 
inserted  in  the  blank  space.  The  circulars  were  shipped  out. 
Jobbers  sent  them  out  in  letters,  in  packages,  and  with  other 
circular  matter.  This  was  three  weeks  ahead  of  the  first  appear- 
ance of  the  advertisements. 

Within  a  week  orders  began  to  come  from  the  jobbers  in  quan- 
tities. By  the  time  the  first  advertisement  appeared  the  cam- 
paign had  been  paid  for  six  times  over  the  orders.  Dealers  fast 
stocked  the  goods. 

When  the  copy  appeared  dealers  pasted  it  up  in  their  windows. 
They  were  new  goods,  nationally  advertised,  and  they  were  push- 
ing them. 

The  New  York  jobber,  three  days  before  the  appearance  of  the 
first  ad,  telegraphed  for  1,500  of  the  articles  to  be  sent  by  express. 
The  very  first  ad,  too,  paid  a  cash  profit  from  mail-orders  from 
towns  where  the  goods  were  not  then  on  sale. 

The  business  forged  ahead.  Capital  was  easy,  then,  to  get 
interested.  There  was  no  drawback  to  expansion.  It  had 
caught  on  with  wonderful  fashion  with  the  consumer.  Within 
six  months  factory  floor  space  was  quadrupled.  Practically 
everj'  worth-while  jobber  in  the  United  States  and  Canada  could 
fill  dealer  orders  for  the  goods. 

The  jobbers'  names  in  connection  with  the  manufacturers 
announcement— and  the  fact  that  the  jobbers  sent  out  this  cir- 
cular matter  to  dealers— actually  forced  them  to  handle  the 
goods.     In  reality,  jobbers  themselves  forced  the  goods  on  their  oicn 

sheLvesl 

Business  authorities  express  the  belief  that  hundreds  of  good 

products  are  never  given  a  chance  with  the  consumer  because 

Overcoming  of  jobbing  apathy,  which  is  a  perfectly  logical  wndi- 

Jobhers'    tion  bred  of  turning  down  yearly  thousands  of  offered 

Apaihy  articles  which  have  not  the  sales  possibilities.  But 
with  good  products  there  is  always  a  means,  if  the  manufac- 
turer will  find  it,  to  edge  in  through  the  narrow  jobbing  lane. 

In  the  drug  line,  as  an  instance,  prices  represent  the  service  the 
goods  give  the  consumer,  usually.  Cost  of  manufacture  ordi- 
narily is  insignificant. 


THE  WHOLESALER 


807 


In  this  connection  is  brought  to  mind  a  famous  product,  which 
since  has  made  over  a  million  dollars  for  the  man  who  marketed 
the  formula.  It  ran  the  gauntlet  in  rapid  fashion  some  years  ago. 
And  incidentally  this  manufacturer  never  bowed  before  the 
jobber  or  dealer.  In  fact,  it  is  related  that  the  head  of  this  busi- 
ness has  never  been  inside  a  jobber's  place  of  business.  Nor  has 
he,  indeed,  ever  solicited  dealer  business. 

That  sounds  mighty  strange  and  there  are  few  manufacturers 
in  the  United  States  who  can  say  the  same  thinff.  But  this  was 
his  method: 

The  product  sold  for  25  cents.  It  was  not  one  which  drug 
dealers  are  likely  to  substitute  on.  The  price  is  too  small,  the 
effort  not  worth  while.  Neither  was  it  one  which  attracted 
price-cutters. 

The  cost  of  manufacture  was  insignificant.  Great  quantities 
could  be  made  up  at  small  cost.  So  the  manufacturer  planned  a 
great  national  campaign.  It  was  replete  in  pages,  quarters  and 
halves.     It  was  scheduled  to  start  on  a  certain  day. 

He  described  the  campaign  in  a  dealer's  circular.  He  showed 
the  drug-store  gap  which  his  goods  filled.  He  told  the  profit  the 
dealer  would  make.  He  showed  how  national  demand  was  ab- 
solutely certain.    He  told  how  his  goods  were  repeaters. 

And  as  a  clincher  he  enclosed  an  engraved  card,  which  when 
returned  to  the  dealer's  jobber  entitled  the  drug  dealer  to  the 
The  Final  ^^^  half-dozen  packages  on  consignment — they  could 
Argument  he  paid  for  in  60  days.  And  if  the  dealer  did  not 
in  Setting^  want  to  pay  for  them  then,  if  they  had  not  been  sold, 
"^  /*iS?    *^^®y  could  be  returned  to   the  jobber  and  credit 

on  joooer     '..^^  • 

given. 

Understand,  in  the  carrying  of  accounts  later,  the  jobber  was  a 
vital  necessity.    He  was  necessary  also  to  carry  stock  to  dealers. 

Coincident  with  the  mailing  of  the  dealer's  circular  containing 
this  consignment  offer — which  tied  up  less  than  10  cents  in  each 
offer  made  to  dealers — the  manufacturer  consigned  stocks  to 
each  jobber  in  proportion  to  the  number  of  cards  the  manufac- 
turer expected  each  jobber  might  receive  from  dealers  in  his 
territory.  The  jobber,  too,  was  given  60  days'  dating.  If  at 
that  time  his  stock  had  not  been  sold  and  paid  for,  he  could  return 
the  goods. 

In  a  little  over  three  weeks  after  the  double  offer  was  made 
the  national  campaign  swung  into  action. 

Dealers  generaUy  had  cashed  their  consignment-offer  cards  on 


if  I' 


906 


THE  WHOLESALER 


the  strength  of  the  generous  profit  and  the  national  campaign. 
There  were  few  breaks  in  the  distribution  chain. 

It  is  related  that  several  weeks  before  the  60  days'  dating  had 
run  out  there  was  scarcely  a  jobber  in  the  United  States  who  had 
not  reordered — and  that  was  the  occasion  for  billing  him  for  the 
goods  that  were  consigned. 

Thus  distribution  was  almost  instant — the  jobbers  were 
stocked  adequately  and  the  money  came  in  in  plenty  of  time  to 
take  care  of  the  advertising  expense  and  other  expenses  of  the 
business.  The  original  investment  in  this  particular  business 
was  small  in  comparison  with  the  money  it  has  made  since. 

And  as  a  matter  of  fact  it  is  virtually  impossible  to  sell  the 
jobber  anything.  It  has  got  to  be  sold  to  the  consumer,  via  the 
dealer.  Then  the  jobber  will  fill  the  orders.  And  he  has  the 
double  function  of  carrying  thousands  of  small  a<icounts  and 
maintaining  a  close-at-hand  supply. 

The  instance  told  above  would  have  been  utterly  impossible 
without  the  stimulus  of  heavy  national  advertising  to  move  the 
goods  from  the  dealer's  shelves  and  bring  about  his  reorders  and 
the  consequent  jobber's  reorders.  Without  strong  consumer 
bombardment  the  plan  would  have  been  a  dismal  flivver,  and 
with  men  of  less  courage  than  this  manufacturer  skimpy  thin- 
spread  advertising  possibly  would  have  brought  about  the  col- 
lapse of  the  plan. 

Is  it  any  wonder  that  this  man  has  never  scraped  before  any 
jobber? 

When  you  see  a  man  who  "has  the  jobbers  pushing  the  goods," 
ask  him  how  long  that  "push"  would  continue  if  it  were  not  for 
th«  pull  at  the  other  end.  On  the  other  hand,  the  jobber  has 
a  double  function  that  it  is  well-nigh  impossible  to  dispense  with 
on  ordinary  retail  propiositions.  But  any  man  who  depends 
solely  on  jobbing  salesmanship  ultimately  will  drop  out  of  busi- 
ness existence.    There  is  no  such  thing,  ordinarily. 


PART  II 
ADVERTISING  METHODS 


I  ■'' 


\ 


[J 
M 

i    \ 

[ 


n 


CHAPTER  IX 

ADVANCE  IN  METHODS  OF  ANALYSIS 

THE  value  of  unassailable  facts  in  planning  sales  cam- 
paigns is  beginning  to  receive  something  like  its  due 
recognition.  This  is  one  of  the  most  marked  evidences 
of  advertising  progress.  For  years  a  few  large  corporations, 
such  as  the  Standard  Oil  Company  and  the  American  Tele- 
phone and  Telegraph  Company,  have  had  departments  whose 
duty  it  was  to  accumulate  and  to  put  into  shape  for  use  the  de- 
tailed facts  which  were  considered  necessary  for  properly  con- 
ducting the  business  of  these  concerns.  The  painstaking 
methods  of  the  United  Cigar  Stores  in  forming  their  ideas  of 
the  value  of  a  site  have  become  well  known.  More  recently 
still  the  Curtis  Publishing  Company  has  surprised  the  textile 
and  the  automobile  and  other  trades  with  the  intimacy  of  its 
knowledge  of  how  its  advertising  clients'  business  is  and  should 
be  run. 

These  methods  are  now  being  applied  to  purely  advertising 
problems.  Among  advertisers  the  gathering  of  data  and  the 
application  of  analytical  methods  to  them  have  become  a  rec- 
ognized necessity.  The  story  of  how  Procter  &  Gamble 
worked  out  the  details  of  the  Crisco  campaign  is  familiar.* 

Printers'  Ink  gives  the  following  statement  of  the  employ- 
ment of  analytical  methods  by  some  leading  concerns: 

tThe  use  of  centralized  data  departments,  while  still  slighted, 
"  Py  Po  means  uncommon  among  the  more  progressive  ad- 

*Priniers*  Ink,  January  9,  1913,  p.  3. 
jPrinteri  Ink,  April  2,  1914,  p.  56. 

811 


» 


312       ADVANCE  IN  METHODS  OF  ANALYSIS 
vertisers     The  National  Cash  Register  Company,  the  Amen- 

Ln  SX  B^k  Company  E.  I- !>"?-*  D^^^^^^  S"^/- 
r^^^TAonvr   Tliirrouchs  Adding  Machine  Company,  vv.  n.  i^^J^ 
&^C;mpaTyTnd  other  Eminent  concerns  find  such  data 

"''Th'e'moshomprehensive  department  of  this  kind  we  know 

of  l^Xted  by  a  large  Chicago  ^^^"^"^/^^^jf  ^iat 
snecial  room  is  used  for  the  data  and  is  in  charge  of  a  I'brar  an 
Kwo^sUints.  Besides  a  carefully  indexed  library  dealing 
w^th  theSstrand  business  affairs  in  general,  special  locked 

dealing  with  peculiar  trade  situations  ^^^^  XtT^  Uke  Se 
pommunitv  of  importance  in  the  country.     These  data  take  tne 
forTKciafX^^     from  salesmen,  carbon  copies,  or  para- 
%Zl^Ji:^tti.^person.l  observations  by  offi^^^^^^^^^^^ 
randum  form  and  newspaper  clippings.     ^^.^^^^^^^^^^^ 
^\h\e  for  anv  official  to  secure  at  a  moment  s  notice  msae  m 
forLtiL  rL^^^^^        any  desired  territory.    Scrap-books  are 
Skept,  in  which'are  parted  important  -wspape^  c^^^^^^^ 
commenting  on  the  firm  or  the  industry     J^^f  ^^^^^^^^^^^ 
are  carefully  indexed  accordmg  to  the  name  of  the  paper  as  weu 
of  tht  Vnb  ect  and  serve  to  give  the  house  an  msight  into  the 
SitSri^i^^^^^^^^^^      the  variou^  newspapers  and  how  they  should 

'^S:;'*:^^^  it  profitable  to  gather 

daU  reSrd^^^^^^      variety  of  subjects  for  use  of  the  sales 
?ote  [Sng'to  different  lines  oftrade   J- ^X'^^^^^^ 

gKrj^tS  Tc^i  td^i^xe^V  v^^^^^^^^^^  metal 

SS.      t^^  uXXod  th^^^  the  National  WC^^^^^^^ 
\Z  worked  out  a  method  which  makes  it  possible  for  it  to  col 
fe^t  Partus  ^nds  of  -Umg  <lata  Pertainm^^^^^^ 
instead  of  centralizing  the  department  the  date  are  dUstn^u^^^ 
among  the  different  branches  where  they  may   ^ J^f^^f^' 
S  manuf ax^turers  find  their  salesmen  invahiable  for  galjermg 
Siis  kind  of  data,  one  concern  even  going  so  fax  as  to  ^^sf  it^ 
salesmen  to  s^  up  and  report  on  the  local  newspaper  situation 
in  eXtow^     Several  such  instances  have  l^^  cited  from 
t?me  to  ti^  in  Pnnters'  Ink.  the  attitude  of  John  Wykoff 
Mauler  Ssid^nt  of  the  Interwoven  Hosiery  Company   on 
Ematte^^^^^^^^  his  account  of  how  he  gathers  and  uses  such  data 


ADVANCE  IN  METHODS  OF  ANALYSIS        313 

should  be  of  help  to  the  above  correspondent.     This  article  ap- 
peared in  the  October  23,  1913,  issue  of  Printers*  Ink. 

It  is  perhaps  not  looking  very  far  into  the  future  to  predict 
that  a  data  department,  in  charge  of  a  man  with  a  real  mastery 
of  the  practical  science  of  compiling  and  interpreting  commercial 
statistics  and  other  data,  will  soon  be  regarded  as  an  absolute 
essential  in  all  selling  or  advertising  undertakings  of  any  appre- 
ciable size.  The  large  corporations  and  other  concerns  with 
ample  capital  have  had  a  temporary  advantage  over  their 
smaller  rivals  in  this  respect.  But  this  advantage  already  is 
being  overcome.  Some  of  the  local  and  national  associations 
have  clearly  shown  that  joint  bureaus  if  adequately  supported 
by  their  members  can  do  this  work  in  some  respects  as  well  as 
the  data  departments  of  large  concerns.  It  is  possible,  more- 
over, that  the  Federal  Government  may  find  occasion  to  enter 
upon  work  of  this  kind.*  Colleges  also  will  find  many  ways  in 
which  they  can  be  of  service  in  this  sort  of  work. 

In  short,  it  may  be  said  that,  as  a  step  in  advance  in  the  de- 
velopment of  advertising,  the  spread  of  respect  for,  and  the 
ability  to  use,  analytical  methods  is  one  of  the  most  important 
lines  of  growth. 

It  is  difficult  to  make  a  choice  among  the  many  important 
articles  showing  this  progress  which  have  appeared  during  the 
past  few  months.  The  articles  selected  for  use  at  this  point,  how- 
ever, fall  into  three  chief  groups:  (1)  Organization  and  methods 
of  data  departments,  (2)  Analytical  methods  in  selling  prob- 
lems, (3)  Analytical  methods  in  advertising  problems. 


1.  ORGANIZATION  AND  METHODS  OP  DATA  DEPARTMENTS 

The  Curtis  Publishing  Company  a  few  years  ago  organized  a 
research  division  which  since  that  time  has  conducted  a  number 
of  investigations  into  the  buying  and  selling  methods  of  various 

*The  plan  for  a  Federal  Bureau  of  Business  Research  proposed  by  A.  W. 
Shaw,  the  editor  of  Sydem,  has  been  well  received  in  many  quarters. 


814       ADVANCE  IN  METHODS  OF  ANALYSIS 


1  , 


1  % 


I 


industries.  The  agricultural  implement  industry  was  covered, 
and  then  there  followed  a  detailed  investigation  into  the  methods 
of  marketing  textiles.  The  automobile  industry  was  investi- 
gated next,  and,  in  the  meantime,  work  was  started  on  an  investi- 
gation of  the  methods  of  selling  various  food  products.  Other 
work  is  now  in  hand  and  the  bureau  has  established  for  itself 
an  enviable  reputation  as  a  source  of  specific  information  on 
marketing  matters. 

C.  C.  Parlin,  who  has  had  charge  of  the  work  of  this  bureau, 
recently  gave  some  interesting  suggestions  about  the  organiza- 
tion and  methods  of  conducting  a  bureau  of  this  kind,  in  a  maga- 
zine article  under  the  title,  "Why  and  How  a  Manufacturer 
Should  Make  Trade  Investigations."  The  following  quota- 
tions are  taken  from  Mr.  Parlin's  article: 

•One  of  the  amazing  things  in  industry  is  the  fact  that  vast 
sums  of  money  are  being  risked  in  enterprise  undertaken  upon 
guesswork.  While  some  manufacturing  enterprises  have  been 
started  only  after  a  careful  study  of  conditions,  others  have  been 
instituted  after  a  few  inquiries  and  upon  a  decision  to  take  the 

chance.  .  . 

Much  of  this  attitude  is  a  legacy  of  the  past  when  conditions 
were  essentially  diflferent  from  to-day.  In  the  earlier  period  of 
our  manufacture  the  markets  were  clamoring  for  goods.  The 
manufacturer  had  but  two  problems:  first,  to  make  the  goods, 
and  second,  to  get  them  within  reach  of  the  consumers. 

To-day  the  supply  in  most  lines  has  caught  up  with  the  de- 
mand and  a  third  very  important  function  develops  upon  the 
manufacturer;  namely,  to  develop  his  markets.  This  function 
involves  firet  of  all  a  thorough  knowledge  of  his  existing  markets 
and  of  all  those  influences  which  are  operating  to  affect  them. 
It  seemed  natural  enough  in  the  earlier  stages  of  industrial 
development  for  the  manufacturer  to  confine  his  attention  to 
the  making  of  goods  and  to  entrust  to  an  outside  sales  organi- 
sation the  second  function  of  getting  the  goods  to  the  consumer. 
It  is  still  advantageous  in  many  lines  for  the  manufacturer  to 
leach  the  retailer  through  jobbing  connections,  but  no  manu- 


•Pnnieri  Inh  Octobw  M,  1914,  p.  S. 


i 


ADVANCE  IN  METHODS  OF  ANALYSIS       315 


facturer,  however  eflScient  and  honorable  the  middlemen  han- 
dling his  product  are,  can  afford  to  be  without  first-hand  knowl- 
edge of  his  markets.  Every  manufacturer  should  know  where 
his  goods  are  sold,  who  buys  them,  and  why  they  are  bought, 
what  type  of  men  are  selling  his  goods  to  consumers,  what 
influences  are  affecting  them,  what  their  sales  methods  and 
sales  costs  are,  to  what  extent  they  are  real  factors  in  making 
sales  and  to  what  extent  they  are  only  order-takers.     .     .     . 

A  certain  manufacturer  in  the  Central  West  was  interested 
primarily  in  breaking  into  the  New  York  markets;  research 
showed  him  that  totally  neglected  at  his  own  door  there  lay  a 
larger  market  easier  to  get  and  likely  to  prove  more  profitable 
than  the  coveted  New  York  market;  research  showed  another 
manufacturer  that  his  distribution  was  far  from  uniform,  an- 
other that  he  was  restricting  his  fine  to  jobbers  when  the  pos- 
sible sale  for  his  goods  was  almost  confined  to  those  stores  which 
aimed  to  buy  direct — another  who  sold  only  direct  that  a  major 
portion  of  the  opportunities  in  his  field  could  be  best  reached 
through  jobbing  channels.     •     •     • 

Commercial  research  work  involves  three  distinct  phases: 

First,  library  work;  second,  field  work;  third,  formulating  con- 
clusions. 

The  first  step,  naturally,  is  the  study  of  printed  sources,  such 
as  the  census  reports  and  other  government  publications.  The 
research  department  may  often  throw  light  upon  a  business  by 
merely  graphing  census  figures.  Often  we  have  found  a  manu- 
facturer with  the  latest  census  reports  at  his  elbow,  but  deeply 
interested  in  maps  and  graphs  of  the  same  census  material  as  it 
applied  to  his  own  business,  indicating  that  while  he  had  per- 
haps read  the  figures,  they  came  to  him  in  a  new  light  as  he  saw 
them  graphed.  This  phase  of  the  work  is  fisted  first,  not  be- 
cause of  its  relative  importance,  but  because  it  is  naturally  the 
first  step  in  making  a  study;  for  the  investigator  should,  of 
course,  take  advantage  of  all  the  information  which  has  already 
been  gathered,  so  that  he  may  waste  no  time  in  duplicating  work 
already  done.  Besides,  he  needs  a  fund  of  trade  information  be- 
fore he  begins  the  field  work;  for  in  no  realm  of  human  endeavor 
is  there  found  a  clearer  exemplification  of  the  truth  of  the  Biblical 
statement,  "To  him  that  hath  shall  be  given,"  than  in  gathering 
commercial  information.  The  man  who  is  already  informed 
and  can  talk  the  language  of  the  trade  soon  inspires  confidence 
and  becomes  a  welcome  visitor;  but  on  the  uninformed  the 


! 


m 


S16       ADVANCE  IN  METHODS  OF  ANALYSIS 

business  world  is  too  busy  to  waste  time.  It  is  particularly 
necessary  for  a  student  approaching  an  industry  with  which  he  is 
not  familiar  to  get  a  fairly  comprehensive  statistical  and  trade- 
journal  knowledge  of  his  subject. 

Then  begins  the  field  work. 

For  successful  research  work  in  conmiercial  lines  it  is  neces- 
sary that  first-hand  information  be  gathered  by  inter^^ewing  rep- 
resentative persons  connected  with  every  phase  of  the  industry. 
Individual  industries,  of  course,  need  different  treatment.  In 
one  industry  the  fundamental  tendencies  of  the  trade  may  be 
learned  from  manufacturers  and  wholesalers,  while  in  another  it 
may  be  necessary  to  make  exhaustive  study  of  retail  conditions. 

Men  should  be  interviewed  in  every  phase  of  the  work;  for 
each  particular  phase  has  its  own  problems  and  furnishes  its 
own  particular  Ught  on  the  industry.  Furthermore,  it  is  neces- 
sary to  talk  not  only  with  important  and  intelligent  people  who 
are  filled  with  ideas,  but  also  with  comparatively  unimportant 
people  who  often  appear  provokingly  stupid.  The  man  who 
gets  all  his  information  merely  from  those  who  have  made  suc- 
cesses has  missed  an  opportunity;  for  while  it  is  often  depressing 
to  talk  with  those  who  have  made  failures  or  who  are  stupidly 
plodding  along  unconscious  of  the  broader  problems,  it  some- 
times happens  that  the  man  who  has  stumbled  at  the  verj' 
threshold  will  throw  light  on  some  elemental  problems  which  the 
successful  man  has  long  ago  mastered  and  forgotten. 

In  general,  the  saying  of  the  old  fisherman  that  "It  takes  all 
the  people  in  the  world  to  know  everything  that  is  known,"  is  a 
good  precept  for  a  research  department.  The  wider  the  scope 
of  the  inquiry  and  the  more  extensive  the  number  of  interviews 
the  safer  are  likely  to  be  the  conclusions. 

A  research  department  can  hardly  proceed  leisurely,  because 
the  field  is  so  vast  and  interesting  and  the  f)ortion  that  can  be 
accomplished  seems  so  infinitesimal  in  comparison  with  the  vast 
amount  to  be  done.  On  the  one  hand,  a  research  department 
is  preparing  a  doctor's  thesis  requiring  calm  thouglit  and  care- 
ful  analysis;  on  the  other  hand,  the  material  must  be  handled 
with  something  of  newspaper  promptness  to  have  it  out  while  it 
is  fresh.  Often,  too,  directors'  meetings  or  factory  require- 
ments make  the  preparation  of  material  for  specific  dates  neces- 
sary. But  while  commercial  research  must  to  some  extent  ac- 
commodate itself  to  time  demands,  the  best  results  can  only 


ADVANCE  IN  METHODS  OF  ANALYSIS 


317 


be  attained  when  suflScient  time  is  allowed  for  extensive  investi- 
gation and  thoughtful  consideration  of  material  obtained. 

Incidentally,  it  is  probably  not  desirable  that  the  research 
man  in  the  early  stages  of  his  work  should  receive  any  con- 
siderable information  from  the  men  of  his  own  organizations. 
He  is  likely  to  give  too  much  weight  to  these  opinions,  and  when 
he  comes  to  start  in  with  his  field  work  is  likely  to  lia\'e  some- 
thing of  the  same  handicap  which  retards  the  man  who  has  been 
brought  up  in  the  industry.  But  when  he  has  made  sufficient 
progress  that  his  ideas  will  not  be  too  much  shaped  from  within 
the  organization,  the  suggestions  and  criticisms  of  his  colleagues 
will  be  of  very  great  value.  In  fact,  the  success  of  the  research 
department  in  the  end  will  depend  very  largely  upon  the  en- 
couragement, support,  and  assistance  of  all  those  within  the  or- 
ganization. 

The  third  step  is  formulating  conclusions. 

While  mere  tabulations  of  material  may  be  valuable,  yet  even 
when  material  is  gathered  and  tabulated  it  is  still  only  raw 
material.  A  very  important  function  of  a  research  department 
IS  to  convert  this  raw  material  into  finished  product.  The 
manufacturer  can,  of  course,  draw  his  own  deductions  from 
the  data  furnished,  but  the  one  who  gathers  the  material  is  in 
the  best  position  to  interpret  it  and  show  its  relation  to  the 
business,  and  the  highest  value  of  the  department  is  likely  to 
come  from  its  ability  to  show  the  vital  relation  of  its  material 
to  the  business  of  the  company. 

Since  industries  vary  widely,  it  is  obviously  futile  to  attempt 
to  formulate  any  definite  program  of  procedure  to  be  applied 
to  the  study  of  an  industry.  The  problems  are  numerous  and 
varied,  and  methods  well  suited  to  one  phase  of  the  work  may 
have  to  be  quickly  changed  when  applied  to  another.  The 
very  nature  of  the  work  requires  that  something  new  be  learned 
every  day,and  the  problem  of  always  wrestling  with  the  unknown 
demands  versatility  rather  than  fixed  method. 

It  is,  of  course,  impossible  in  a  compilation  of  this  kind  to  go 
into  the  science  of  statistics  as  applied  to  methods  of  analysis 
for  advertising  and  selling  problems.  In  case  of  many  manu- 
facturers, an  analysis  of  this  kind  is  unnecessary,  but  in  case  of 
others  it  would  be  vital  at  the  very  outset  to  have  a  thorough 
knowledge  of  the  science  of  statistics.    John  Winsell,  statistician 


«18       ADVANCE  IN  METHODS  OF  ANALYSIS 

and  business  investigator,  recently  wrote  an  article  on  how  to 
study  the  "per  capita,"  which  contains  some  suggestions  of 
value  not  only  to  the  large  analyst,  but  to  the  small  concern  in- 
terested in  applying  analytical  methods.  In  the  course  of  this 
article  he  said: 

It  has  been  said  over  and  over  again  that  tlie  advertising  manager's 
business  is  to  know  hisfirrrCs  situation  loith  the  final  consumer  better 
than  any  one  else.  There  is  no  more  thoroughly  accurate  means 
of  getting  at  this  than  to  make  a  study  of  per  capita  conditions.  It  is 
the  heart  of  an  accurate  st7idy  of  mass  averages  which  advertising 
must  meet  to  succeed.  This  article  concerns  the  technique  of  per 
capita  study.    \Note  by  Ed.  of  A.  &.  S.] 

*The  population  of  the  United  States  is  now  approximately 
100,000,000.  To  be  exact,  if  the  Government  estimate  of  the 
population  on  July  1,  1914,  be  used  as  a  basis,  we  will  pass  the 
hundred-million  mark  on  April  2,  1915,  as  the  daily  increase  is 
4,4S3  persons. 

All  national  business  enterprises — whether  a  commodity 
having  national  or  partly  national  possibilities,  whether  chewing 
gum  or  crockery,  baking  powder  or  leather  belting,  may  find  a 
study  of  actual  field  conditions  on  a  per  capita  basis  of  vital  im- 
portance.    Business  and  sales  pivot  on  popidation. 

The  first  and  most  essential  step  toward  this  end  is  a  com- 
parison of  the  per  capita  consumption  of  the  product  in  different 
localities.  In  cases  where  the  exact  national  volume  of  business 
is  known,  it  is  extremely  simple  to  figure  per  capita.  For  exam- 
ple: as  50,000,000  pounds  of  laundry  soap  are  sold  throughout 
the  country  every  week,  it  does  not  require  much  mental  effort 
to  estimate  that  the  per  capita  consumption  is  one  half  pound 
per  week. 

When  it  comes  to  estimating  the  per  capita  consumption  for  a 
commodity  not  so  staple,  or  if  it  is  desired  to  get  a  localized  per 
capita  consumption  in  any  state  or  group  of  states,  or  county  or 
city  or  class  of  city  or  town,  the  process  is  much  more  compli- 
cated— 100  per  cent,  accurate  results  are  natiu*ally  impossible, 


*  Advertising  and  Selling,  January,  1915,  p.  12. 


ADVANCE  IN  METHODS  OF  ANALYSIS       319 

but  it  is  usually  immensely  valuable  to  get  the  best  estimates 
possible,  and  in  such  work  the  need  for  a  new  kind  of  practical 
business  statistical  work  is  demonstrated. 

When  some  one  recently  informed  the  president  of  a  large 
soap  concern  that  664,000  pounds  of  laimdry  soap  had  been  sold 
in  the  state  of  Connecticut  in  one  week,  it  set  him  thinking. 
Like  other  executives,  he  had  never  stopped  to  closely  analyze 
the  statistics  of  his  own  industry — or,  what  is  more  likely,  had 
never  seen  any  or  made  any  effort  to  compile  them.  He  natu- 
rally asked  whether  this  amount  was  above  or  below  the  average. 
The  next  intensely  interesting  question  was:  what  proportion  of 
the  total  had  his  company  sold?  When  his  accountants  had 
matched  against  the  total  state  figures  the  firm's  sales  figures, 
it  "made  him  sick."  It  also  gingered  up  him  and  his  sales  staff 
as  nothing  else  could  have  done. 

Incidentally,  it  took  a  great  deal  of  scurrying  on  the  part  of 
his  subordinates  to  obtain  data  about  his  own  total  sales  in  the 
state — a  fact  which  had  its  own  little  lesson  for  him.  Why 
should  so  fundamental  a  factor  as  his  statistical  position  in  rela- 
tion to  soap  in  general,  and  to  his  competitors*  sales,  be  so  buried 
in  the  melee  of  daily  routine.?*  Why  shouldn't  it  be  the  most 
conspicuous  factor  in  the  records  and  in  the  minds  of  the  sales 
force? 

Resentment  against  his  own  poor  showing  in  Connecticut 
made  this  manufacturer  wonder  what  the  normal  per  capita 
consumption  of  laundry  soap  was.  Taking  664,000  pounds  of 
laundry  soap  for  Connecticut  and  dividing  it  by  the  population 
(1914),  1,202,000,  he  found  that  the  per  capita  consumption  was 
.55  of  a  pound  per  week — or  more  than  10  per  cent,  above  the 
average  for  the  United  States. 

This  incident  so  interested  the  manufacturer  that  he  deter- 
mined to  do  the  difficult  work  of  making  locality  analyses  of  the 
consumption  of  laundry  soap,  covering  the  entire  country,  state 
by  state,  and  dividing  the  population  by  grades  of  town.  He 
began  by  working  in  his  "  sick  cities."  A  crew  of  trained  investi- 
gators was  put  on  the  job  of  canvassing  the  city.  They  went 
from  house  to  house,  taking  the  pulse  of  the  town.  Some  of  the 
questions  asked  were: 

(1)  What  brand  of  laundry  soap  do  you  use? 

(2)  How  much  laundry  soap  do  you  use  per  week? 

(3)  Why  do  you  prefer  brand? 


ill 


820       ADVANCE  IN  METHODS  OF  ANALYSIS 

(4)  Which  other  brands  have  you  tried? 

(5)  Why  did  you  reject brands? 

(6)  What  various  uses  do  you  make  of  laundry  soap? 


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Fig.  1.    State  "percapiiarithms.'* 

The  investigators  were  required  to  report  on  the  general  condi- 
tions, such  as  neighborhood,  type  of  house,  class  of  people  living 
in  that  vicinity,  etc. 

One  interesting  feature  brought  out  was  the  territorial  pref- 
erences for  yellow  or  white  laundry  soap.  Yellow  soap  was 
preferred  wherever  the  water  was  soft,  and  white  where  the 
water  was  hard. 

As  the  consumer  investigations  progressed,  variations  in- 
numerable in  local  conditions  were  disclosed,  many  vitally  affect- 
ing the  success  of  an  advertising  campaign  which  would  not  be 
brought  to  the  firm's  attention  ordinarily.  The  difference  in 
local    pay-days,    average    income,    nationality,    predominating 


ADVANCE  IN  METHODS  OF  ANALYSIS       321 

occupations,  standard  of  living,  and  many  other  facts  useful  in 
determining  the  fertility  of  a  given  section — all  these  factors  are 
charted  on  a  huge  wall  map  in  the  sales  manager's  oflBce,  by 
means  of  confidential  symbols. 

This  manufacturer  now  has  a  mental  picture  of  the  consumer 
mind  in  each  section  of  the  country.  He  no  longer  surmises, 
guesses,  thinks,  or  assumes.  He  knows.  He  knows  not  only  his 
own  position  in  the  field,  but  the  relative  strength  or  weakness 
of  every  competitor.  What  is  more  he  uses  the  information  in 
setting  quotas  for  the  sales  staff,  and  in  bringing  backward  dealers 
to  realize  their  position  in  ratio  to  other  places  of  the  same  size. 
In  addition,  it  forms  a  partial  check  to  over-selling  credit. 

This  method  gradually  builds  up  a  complete  statistical  analy- 
sis of  the  laundry  soap  industry,  and  brings  the  once  gambling 
occupation  of  soap  selling  closer  to  the  ideal  of  the  insurance  busi- 
ness, where  death  averages,  etc.,  are  accurately  known. 

The  manufacturer  now  has  a  bird's-eye  view  of  the  entire 
country,  or  detailed  statistics  of  any  section  thereof,  so  that  he 
can  put  his  finger  on  a  sore  spot  with  magic  infallibility,  and 
quickly  discover  whether  the  trouble  is  due  to  any  local  condi- 
tion which  affects  per  capita  consumption,  or  is  the  result  of  an 
energetic  competitive  campaign.  As  a  result,  competitors  get 
black  and  blue  in  the  face  trying  to  beat  him,  but  he  is  possessed 
of  so  much  greater  breadth  of  view  and  basic  understanding  of 
his  industry  that  it's  like  trying  to  push  over  an  old  oak  tree  to 
beat  him  to  a  market  he  held. 

For  the  benefit  of  those  who  desire  to  arrive  at  the  state  per 

capita  consumption  of  any  given  product,  with  the  minimum  of 

The  Tech-  ^^^^^  ^^^  calculation,  once  the  total  quantity  is  known, 

niquc  of   the  writer  has  prepared  tables  (see  Fig.  1),  which 

"PerCa-    might  be  called  state  "percapitarithms." 

pita  Fig-      \  «  percapitarithm  "of  any  state  may  be  defined  as  the 

^"'y  number  of  units  which  would  be  assigned  to  that  state  if  a 
specified  number  of  units  were  divided  among  all  the  states  of 
the  Union,  according  to  their  several  populations.  To  illustrate : 
Let  us  say  1,000  units  represent  the  United  States  population. 
As  New  York  state  has  approximately  10,000,000  population, 
or  10  per  cent,  of  the  entire  population  of  the  United  States,  its 
share  of  units  would  be  100.  Pennsylvania,  8.3  per  cent,  of  the 
population,  her  share  would  be  83,  and  so  on  for  each  state, 
until  we  reach  Nevada,  whose  share  would  be  1  per  cent. 

If  4,000  units  were  to  be  distributed,  it  is  evident  that  the  share 


I 


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S2«       ADVANCE  IN  METHODS  OF  ANALYSIS 

of  each  state  would  be  four  times  as  great  as  it  was  for  the  1,000 
distribution. 

For  the  purpose  of  rough  approximations,  however,  it  will  be 
found  that  the  ten  tables  shown  in  Figure  1  are  sufficient.  These 
have  been  prepared  for  1,000,  2,000,  3,000,  etc.,  up  to  10,000. 
If  an  article  has  a  national  consumption  of  90,000,  the  consump- 
tion for  CaHfornia,  in  logical  proportion,  should  be  at  least  2,520. 
as  is  s^n  by  referring  to  column  9,  which  gives  the  "percapitar- 
ithms"  for  9,000  and  adding  a  cipher  to  252— the  number  which 
is  opposite  California.  In  Illinois  the  consumption  should  be  at 
least  5,490,  and  in  Maine  720. 

Even  a  national  periodical  finds  it  useful  to  study  per  capita. 
A  very  interesting  result  was  obtamed  recently  by  applying  the 
"percapitarithm"  principle  to  the  circulation  of  a  small  class 
magazine  (see  Fig.  2).  The  appeal  was  universal,  and  there 
were  subscribers  in  every  state  in  the  Union.  The  circulation 
had  just  turned  the  10,000  mark,  and  the  statement  that  there 
were  110  subscribers  in  Iowa,  or  that  there  were  765  subscribers 
in  Massachusetts,  conveyed  fittle  information  as  to  whether 
these  figures  were  very  high  or  very  low  as  compared  with  the 
average  for  the  country. 

In  order  to  show  more  clearly  the  exact  situation,  the  graphic 
chart  (shown  in  Fig.  2)  was  prepared.  The  shaded  part  repre- 
sented the  "percapitarithms"  for  the  states  in  the  order  of  their 
size,  and  of  the  divisions  in  their  geographical  location.  The 
black  lines  represented  the  circulation  of  the  magazine  in  that 
state  or  division. 

From  the  chart  it  was  very  apparent  that  New  York,  Con- 
necticut, Massachusetts,  and  New  Jersey  were  the  strongholds 
of  the  magazine's  circulation;  and  that  several  other  places, 
notably  the  District  of  Columbia,  had  very  much  above  the 
average  circulation  for  the  whole  country. 

In  the  section  of  the  chart  giving  the  divisions  the  strength 
of  New  England,  the  Middle  Atlantic,  and  the  Rocky  Mountain 
States  is  at  once  apparent  to  the  eye.  In  this  chart  the  figures 
following  the  names  of  the  states  or  divisions  are  the  "percapi- 
tarithms**  and  have  no  connection  with  the  circulation  figures  of 
that  locality. 

A  glance  at  the  chart  shows  the  situation  much  better  than 
colunms  of  figures  or  pages  of  typewritten  reports  could  do. 
Suppose  the  cu-culation  had  been  85,000  instead  of  10,000.  The 
•*pcrcapitarithm"  for  the  different  states  would  be  numbers 


ADVANCE  IN  METHODS  OF  ANALYSIS       32S 


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SU       ADVANCE  IN  METHODS  OF  ANALYSIS 

midway  between  columns  8  and  9  in  Figure  1,  with,  of  course, 
the  addition  of  a  cipher.  These  can  quickly  be  estimated  by 
adding  one  half  of  the  "percapitarithm"  in  column  1  to  the 


SOME   ESTIMATED   PER  CAPITA   COMSUMPTIONS   IN    UNITED   STATES 


Per  Capita 
Consumption 

Wheat 6.48  bu. 

.  Cora 27.3    bu. 

Sugar 79.9    lbs. 

Wool 6.32  lbs. 

Cotton 24.8    lbs. 

Coffee 9.33  iba. 

Tea 0.89  lbs. 

Rice 5.24  lbs. 

gfead 52.7    loaves 

Flour  and  Meal 142. 13  lbs. 

Fresh  Beef 73. 1    lbs! 

Salt  Beef 11.5    lbs. 

Fresh  Pork 23.7    lbs. 

Salt  Pork 23.1     lbs. 

Other  Meat 16.2    lbs. 

P?V^try 14.1    lbs. 

J,»^ 16.6  lbs. 

Kggs 17.7  doz. 

Milk 74  1  qts. 

Butter 24 . 4  lbs. 

Clieese ] . .  3.3  lbs! 

{f  rd 17.5    lbs. 

Molasses 0.75  gals. 

Potatoes 3  1     bu. 

Fruits $4.26 

Men*s  Clothing  (per  adult  male) $27.77 

Women's  Clothing  (per  adult  woman) $20.37 

Children's  Clothing  (per  child  under  10) $  3.05 

jyi $  8.01 

Lightmg $  2.03 

Furniture $  8.33 

Books  and  Papers $  2 .05 

Tiife  Insurance $  6 .  67 

Malt  Liquors 19.75  gals. 

J  obacco $  8 .  44 

Automobiles  and  Accessories  (1911) $  4.67 

Diamonds $  0 .  43 

Works  of  Art ] .  $  1  '21 

Cigarettes , 124.6    cig. 

W  iiiskey  and  Rum 1.4    gals. 

Some  of  these  figures  are  several  years  old,  but  are  quoted  because 
then  were  more  nearly  normal  than  now. 


Percent. 
Increase 
or  Decrease 
since  1875 

-f  86.1 
-f  52.5 
+107.9 
+  59.2 
+144.5 
+  28.7 
+  38.2 

—  21.4 

—  41.8 
+  43.7 
+  59.3 
+  21.4 
+  61.2 
+  18.4 
+  72.3 
4-  49.2 
+  33.4 
+  62.4 
+  43.7 
+  54.3 
+  12.4 
+  18.7 
+  13.2 
+  18.1 
+  52.3 
+  49.7 
+  54.3 
+  65.9 
+  43.7 
+  37.2 
+  63.8 
+  72.5 
+  71.3 
+185.5 
+  85.2 
+  0.0 
+285.0 
+320.0 
+530.0 
+226.0 

conditions 


ADVANCE  IN  METHODS  OF  ANALYSIS        325 

corresponding  one  in  column  8.  To  illustrate:  In  Missouri, 
add  one  half  of  34,  which  is  17,  to  272,  and  we  have  306.  Then 
add  one  cipher,  and  3,060  is  the  result  desired.  If  the  circulation 
had  been  82,000,  one  fifth  of  34,  or  7,  would  have  been  added  to 
272. 

The  mention  of  magazine  circulation  "  percapitarithms "  is 
interesting  in  another  way — ^because  of  the  possibility  of  match- 
ing up  sales  per  capita  with  the  circulation  per  capita  of  the 
magazine  or  magazines  to  be  used  for  advertising  the  article. 

There  are,  of  course,  a  majority  of  articles  w^hich  are  not  uni- 
versally used,  but  that  does  not  in  the  least  affect  the  fact  that 
per  capita  is  the  logical  measure  of  consumption.  It  is  only 
necessary — if  a  net  per  capita  is  desired — to  eliminate  the  unde- 
sirable and  inaccessible  population  and  use  the  remainder  as  the 
population  unit.  The  negroes,  the  Indians,  the  illiterate,  the 
foreign  born,  the  rural,  the  semi-rural,  the  minors,  the  women — 
any  or  all  of  these  and  other  factors  may  be  removed — if  it  is 
beyond  dispute  that  they  should  be  removed.  Inaccessible 
population  means  that  population  which  cannot  be  reached 
directly  by  railway.  There  is  1,778,000  of  such  population  in 
the  East  alone. 

Wherever  the  per  capita  figures  concerning  an  industry  have 
been  used  they  have  awakened  the  management  to  greater  alert- 
ness and  creative,  educational  work  upon  consumption,  and  also 
stimulated  the  entire  sales  organization.  Per  capita  knowledge 
concerning  all  industries  should  be  known  everywhere,  but  it 
isn't;  mainly  because  of  the  expense  of  compilation  which  few 
individual  firms  have  been  willing  to  bear.  It  is  so  simple  to 
figure  the  per  capita  for  tea  or  cigarettes,  from  ofiicial  figures, 
but  when  it  comes  to  an  article  like  paint,  where  many  kinds  of 
material  in  many  forms  are  sold,  it  is  a  most  difficult  matter. 
The  only  way  to  secure  it  is  by  representative  national  dealer 
canvass,  well  checked  up  and  cautiously  analyzed.  Yet  in 
many  cases  it  is  not  at  all  expensive  to  secure  such  vital  informa- 
tion. 

2.   ANALYTICAL  METHODS   IN  SELLING   PROBLEMS 

The  use  of  analytical  methods  in  the  study  of  selling  problems 
necessarily  must  progress  slowly  if  its  development  is  to  be  per- 
manently satisfactory.  It  will  be  a  long  time  before  work  of 
this  sort  has  been  formulated  with  sufficient  completeness  to 


82©       ADVANCE  IN  METHODS  OF  ANALYSIS 

make  it  possible  to  standardize  methods.  It  will  be  necessary 
to  develop  certain  forms  of  technique  in  collecting  and  using 
figures  quite  different  from  those  employed  by  statisticians  in 
other  types  of  investigation.  But  the  work  has  been  com- 
menced, and  year  by  year  marked  advance  is  shown  in  the  skill 
with  which  available  methods  are  applied  to  problems  of  this 
kind.  J.  George  Frederick  recently  contributed  to  System  an 
article  under  the  title  "More  Time  to  Sell,'*  in  which  he  showed 
some  of  the  methods  available  to  practically  any  type  of  concern 
for  making  an  analysis  of  selling  problems  to  save  the  time  and 
energies  of  the  sales  force. 

*By  the  time  that  John  Smith,  representing  a  big  machinery 
house  in  New  York,  walks  for  the  first  time  into  the  oflSce  of  the 
head  of  William  Jones  &  Company  of  Denver  for  a  personal 
conference  concerning  a  prospective  order,  half  of  the  work  of 
selling  has  been  done.  And  it  has  been  done  from  the  sales 
manager's  oflBce  in  New  York. 

The  bigness  of  this  country,  and  the  eflBciency  of  broad  na- 
tional advertising  mediums,  has  made  big  sales  problems  and 
big  sales  territories.  The  modem  sales  manager  is  finding  it 
increasingly  diflBcult  to  sit  in  a  little  oflSce  and  plan  out  a  sales 
campaign  for  a  country  3,000  miles  broad,  in  which  every  class 
of  people,  every  climate,  and  every  degree  of  wealth  and  occupa- 
tion are  represented.  He  must  have  specific  facts  on  which  to 
base  his  campaign.  He  cannot  rely  upon  his  personal  estimates 
and  upon  rule-of- thumb  computations.  He  has  been  forced  to 
find  better  and  more  eflScient  means  of  knowing  what  is  going  on. 
He  must  gather  together  facts  and  figures  from  representatives 
in  the  field;  he  must  tabulate  these  data  so  that  he  can  compre- 
hend the  conditions  that  may  make  or  break  his  campaign;  and  he 
must  employ  trained  men  who  act  in  accordance  with  these  plans. 

The  live  house  has  long  ago  broken  away  from  the  old-fash- 
ioned "hire-and-fire"  plan  of  sales  work.  Instead  of  putting  a 
line  of  samples  and  equipment  into  the  hands  of  some  salesman, 
of  dosing  him  liberally  with  "ginger"  and  of  sending  him  out 
into  a  territory  with  instructions  to  "make  good  or  be  fired,** 
a  steady  grist  of  sales  is  now  brought  in  by  a  very  different  plan. 

*Syttem,  February,  1914,  p.  178. 


ADVANCE  IN  METHODS  OF  ANALYSIS       327 

A  large  part  of  the  work  of  selling  is  done  before  the  salesman 
leaves  the  office.  And  when  he  does  leave  he  goes  with  a 
definite  purpose  to  see  a  definite  prospect.  In  other  words, 
that  salesman  is  aimed  at  a  specific  sale.  It  is  a  long  cry  from 
the  salesman  of  to-day  back  to  the  salesman  of  yesterday  who 
was  literally  turned  loose  in  a  territory  and  instructed  merely  to 
sell.  Such  wastefulness  of  energy  and  time  is  now  being  reduced 
by  more  scientific  practices. 

One  of  the  most  important  phases  of  the  new  science  of  man- 
agement that  is  being  put  into  operation  in  sales  work  is  the 
compilation  of  accurate  data  and  records  about  the  essential 
details  of  the  selling  work  in  the  field.  These  data  are  collected 
by  the  salesmen,  reduced  to  written  reports,  and  transferred  to 
the  sales  manager's  files  for  use. 

This  general  reform  in  selling  methods  has  been  developing  for 
a  long  time.  One  of  the  problems  has  been  to  get  salesmen  to 
render  more  than  the  most  rough  and  casual  reports  on  local 
conditions.  Salesmen  are  not  hired  or  trained  to  be  investiga- 
tors, and  report-makers — they  are  trained  to  meet  men  and 
convince  them  about  the  goods.  As  a  result,  perhaps  ten  or 
fifteen  years  have  been  wasted  by  large  concerns  in  the  effort  to 
bring  their  sales  force  to  help  them  in  getting  more  accurate  and 
full  data  about  local  conditions. 

To-day  business  men  recognize  that  it  does  not  do  to  mix 
jobs;  that  a  salesman  should  be  put  on  the  road  to  sell,  and  that 
when  investigation  work  is  necessary,  it  should  be  undertaken 
by  special  investigators,  whose  task  it  is  to  investigate  and  noth- 
ing else.  It  is  both  an  exj>ense  and  a  hardship  to  require  a 
six-thousand-dollar-a-year  salesman  to  spend  any  considerable 
portion  of  his  time  in  investigating  conditions  which  a  two- 
thousand-dollar-a-year  man,  or  a  special  investigator  could  do  at 
much  less  cost.  The  actual  time  that  the  high-grade  salesman  is 
really  in  action,  working  on  his  prospects,  is  surprisingly  small 
when  it  is  carefully  computed. 

One  firm,  not  long  ago,  made  a  study  of  this  sort  and  found 
that  its  six-thousand-dollar-a-year  men  were  spending  on  an 
average  but  two  hours  a  day  in  talking  to  the  trade  and  present- 
ing the  company's  sales  arguments.  The  rest  of  the  time  was 
spent  in  travelling,  in  arranging  for  sample  displays,  in  making 
out  reports,  and  in  other  routine  work. 

How  are  the  efficient  sales  generals  of  to-day  getting  their 
field  reports  which  are  so  vital? 


ms       ADVANCE  IN  METHODS  OF  ANALYSIS 


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ADVANCE  IN  METHODS  OF  ANALYSIS       32d 

In  the  first  place,  many  of  the  most  thorough-going  have 
greatly  increased  the  importance  and  scope  of  the  sales  mana- 
ger's functions  at  the  home  office.  The  average  sales  manager 
used  to  be  little  more  than  a  man  handy  at  writing  "ginger" 
letters  and  at  filling  out  system  forms.  To-day,  however,  the 
sales  manager  is  a  vital  factor  in  the  business.  The  new  type  of 
sales  manager  knows  too  much  to  trust  to  salesmen's  reports. 
He  has  learned,  for  instance,  that  the  salesman  has  not  analyzed 
the  cessation  accounts  with  anything  like  accuracy.  In  other 
words,  the  salesman's  eyes  are  always  on  the  prospect  he  is  going 
to  get;  he  is  rarely  able  efficiently  to  analyze  why  he  failed  to  get 
a  customer  which  the  house  has  lost. 

One  house  has  found  that  it  had  lost  eleven  hundred  dealers 
in  three  years  although  it  had  gained  even  a  larger  number  of 
new  ones,  and  its  business  had  gone  forward.  The  salesman 
could  make  no  satisfactory  explanation  of  this  matter  and  sought 
to  minimize  its  importance.  But  the  sales  manager,  who  was  a 
real  sales  general,  sent  special  investigators  into  the  field  to  call 
on  an  extended  list  of  the  cessation  accounts,  well  distributed 
geographically,  and  he  learned  exactly  and  in  detail  just  why 
they  had  stopped  buying  from  the  fiim.  The  result  was  de- 
cidedly interesting.     It  showed: 

(1)  That  12  per  cent,  of  cessations  were  due  to  unreasonable 
actions  on  the  part  of  the  credit  department. 

(2)  That  15  per  cent,  of  the  goods  were  found  to  be  really  un- 
satisfactorily manufactured. 

(3)  That  the  shipping  department  had  been  grossly  slack  in 
the  case  of  20  per  cent. 

(4)  That  the  salesman  had  been  inattentive  and  even  imperti- 
nent in  the  case  of  11  per  cent. 

(5)  That  the  salesman  had  made  misrepresentations  which  he 
was  unauthorized  to  make  in  the  case  of  7  per  cent. 

(6)  That  indeterminate  and  casual  factors  were  responsible 
for  35  per  cent. 

LOCAL  CONDITIONS 

1.  What  class  of  people  live  in  this  locality  and  what  is  their  source  of  in- 
come? (Rich,  medium,  or  poor.) 

2.  What  important  industries  are  located  here? 

3.  Are  the  people  here  mail-order  buyers? 

4.  What  is  the  number  of  rural  free  delivery  routes? 

5.  Do  housewives  ask  for  articles  in  our  line  by  name  or  trademark? 

6.  What  kind  of  advertising  is  most  successful  locally — an  oflfer  of  "some- 
thing for  nothing,"  seasonable  articles,  bargains,  price  displays? 


I 


\ii' 


330       ADVANCE  IN  METHODS  OF  AN^VLYSIS 

7.  Is  our  product  most  in  demand?  Name  competitive  articles  sold  In 
order  of  preference. 

8.  Do  local  dealers  make  good  window  trims,  store  arrangements,  or  have 
special  features  to  attract  crowds? 

9.  Do  surrounding  crop  conditions  affect  local  business?  U  so,  report  on 
crops. 

10.  What  prices  are  competitors  making  to  local  dealers? 

11.  What  local  advertising  is  done  by  competitors? 

12.  What  is  the  total  number  of  dealers  who  sell  our  class  of  products? 

13.  How  many  sell  our  goods? 

14.  Estimate  the  approximate  annual  consumption  of  our  class  of  goods  locally. 

WTien  the  sales  manager  got  these  data  laid  out  in  front  of  him, 
some  radical  changes  were  made  in  the  methods  of  the  house. 

The  experience  was  the  final  demonstration  to  this  sales  man- 
ager that  it  was  important  to  get  information  from  the  field  from 
some  other  source  rather  than  the  salesmen  themselves. 

He  arranged  with  a  firm  of  investigators  to  make  reports  regu- 
larly every  three  months  in  a  certain  selected  group  of  cities,  to 
fit  the  particular  situation  at  the  time.  He  also  planned  that 
these  periodical  investigations  should  gradually  build  up  his 
sales  information  at  the  home  oflSce  in  a  way  that  would  make 
him  prepared  with  the  viewpoint  to  analyze  almost  any  situation 
which  might  arise. 

The  first  step  that  this  sales  manager  took  was  to  rearrange  his 
entire  sales  organization.  Instead  of  laying  off  on  a  map  a  group 
of  arbitrary  districts,  based  on  no  particular  consideration,  he 
went  to  work  scientifically  to  arrange  his  sales  districts.  These 
he  now  calls  " sales  blocks."    He  bases  these  districts  upon : 

(1)  Travelling  considerations. 

(2)  General  unity  of  character  of  prospects. 

(3)  Competitive  conditions. 

Next  he  began  to  compile  information  of  a  very  exact  sort 
about  each  one  of  these  blocks.  He  secured  seven  standard  fac- 
tors on  which  to  base  an  analysis  of  results  in  these  sales  blocks. 
These  factors  were  as  follows: 

(1)  Population. 

(2)  Area  and  distance. 

(3)  Competitive  conditions. 

(4)  Ground  estimate  of  possible  consumption. 

(5)  Ground  estimate  of  character  of  people  and  wealth. 

(6)  Trade  and  special  factors. 

(7)  The  degree  "of  saturation,"  or  sales  made  prior  to  date. 
The  sales  manager  refused  to  recognize  any  extraordiuan'^ 


;    r 


ADVANCE  IN  METHODS  OF  ANALYSIS        331 

merit  or  amount  of  sales  made  in  any  district  unless  it  was 
matched  up  against  these  test  factors.  When  a  salesman  makes 
a  seemingly  phenomenal  sales  record  it  is  matched  up  against 
these  factors;  sometimes  the  phenomenal  sales  record  tones 
down  very  considerably  in  comparison  with  the  smaller  sales 
m  another  territory,  because  in  the  first  territory  a  single  sale 
was  about  as  hard  to  make  as  three  sales  in  the  second.  This 
kind  of  analysis  solved  a  number  of  puzzles  which  other  sales 
inanagers  had  met  in  past  years— such  a  puzzle,  for  instance,  as 
that  of  a  high-grade  salesman  who  had  a  splendid  record  in  a 
certam  territory  only  to  make  a  marked  failure  in  another  terri- 
tory shortly  afterward. 

Such  investigations  mark  only  the  beginning  of  the  modern 
methods  of  field  reporting  which  many  capable  sales  generals 
are  compilmg  for  their  home  office.  In  order  to  secure  the  basis 
for  efficiently  applying  the  seven  standards,  these  sales  managers 
were  obliged  to  have  some  thorough  local  investigation  work 
done.  The  manufacturer  of  a  special  device  actually  had  a 
canvass  made  throughout  the  country  of  every  firm  who  used 
any  kind  of  product  of  the  type  he  made  and  sold.  These  data 
were  compiled  by  his  men  on  the  spot;  the  sales  manager  was 
then  able  to  figure  out  a  per  thousand  prospect  average  for  each 
competitive  make,  as  well  as  for  his  own,  in  any  vicinity.  By 
periodically  revising  this  tabulation  he  was  able  to  tell  with 
smne  degree  of  accuracy  to  what  extent  his  sales  force  was 
efficient  in  any  territory.  Such  a  course  is  not  possible  with  all 
classes  of  business,  but  a  great  deal  of  such  investigation  work 
can  profitably  be  done  with  almost  any  business. 

ma  ATTITUDE  TOWAHD  ADVERTISED   GOODS 

1.  What  trade  papers  does  he  subscribe  to? 

2.  Which  paper  does  he  prefer,  and  why? 
S.  Does  he  read  trade  paper  advertising? 

4.  What  general  magazines  does  he  subscribe  to? 

5.  Does  he  read  advertisements? 

6.  Does  he  order  as  a  result  of  trade  paper  or  magazine  advertising? 

7.  Has  he  ever  advertisied,  and  how?     Secure  copies  of  his  ads. 

8.  Has  he  a  mailing  list  which  he  circularizes  regularly? 

9.  Does  he  do  any  window-trimming  and  how? 

10.  Does  he  read  the  advertising  literature  he  receives? 

11.  Does  he  give  preference  to  trademarked  goods? 
li.  What  does  he  do  to  co-operate  with  advertisers? 

13.  Does  he  beUeve  in  advertising,  or  look  on  it  as  a  tax? 

U.  How  does  he  feel  toward  advertiser!  who  sell  catalogue  houses? 


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S3£        ADVANCE  IN  METHODS  OF  ANALYSIS 

For  instance,  a  tire  manufacturer  has  now  made  it  a  plan  to 
investigate  periodically  the  kind  of  service  which  his  brancli 
houses  are  gi\'ing  the  retailers.  An  outside  firm  of  investigators, 
whose  minds  are  absolutely  free  from  any  prejudice  in  the  busi- 
ness, call  upon  both  retailers  and  consumers  in  the  automobile 
field  and  learn  to  what  extent  the  branch  houses  are  rendering 
service  and  whether  it  is  satisfactory.  In  this  way,  and  in  this 
way  alone,  can  this  house  keep  a  good  local  check  upon  the  work 
of  the  rank  and  file  in  the  district  offices.  The  home  office  rarely 
gets  into  touch  wath  any  but  the  district  managers  and  assistants, 
and  it  desires  to  know  more  intimately  how  the  men  these  people 
hire  carry  out  the  spirit  of  the  company's  policies. 

THE   dealer's  PRACnCB 

1.  Wbat  is  his  attitude  on  Parcel  Post? 

2.  What  is  he  doing  to  meet  catalogue  house  competition? 

8.  What  is  the  average  number  of  letters  an<l  circulars  he  receives  daily? 
4.  How  many  clerks  does  he  employ,  and  what  does  he  pay  them?    Does  he 
take  time  to  educate  them  in  salesmanship? 

6.  Does  he  work  up  sales  schemes  to  increase  business? 

6.  What  class  of  people  does  he  sell— rich,  poor,  or  medium? 

7.  What  kind  of  location  has  he?  .  i    i  • 

8.  Is  the  store  well  kept,  stock  attractively  arranged?     Does  he  mark  his 
goods  in  plain  prices  or  blind  figures? 

9.  What  does  his  stock  amount  to? 

10.  How  much  in  our  lines  does  he  carrj? 

11.  How  oft^n  does  he  take  inventory?  Does  he  have  special  sales  for 
closing  out  stock,  and  how  often? 

12.  Does  he  maintain  prices,  or  is  he  kno\ni  locally  as  a  price-cutter? 
IS.  Does  he  prefer  buying  from  jobber  or  manufacturer? 

U.  What  percentage  of  profit  does  he  require,  and  what  is  his  cx)sl  of  doing 
business? 

15.  Has  he  a  dehvery  system?    How  much  business  does  he  do  by  mail  or 

telephone? 

16.  Does  he  prefer  giving  orders  to  a  representative  or  mailing  them  to  the 

housed 

17.  How  often  do  salesmen  in  our  line  call?  How  often  does  he  see  our  sales- 
men?    What  comments  does  he  offer  on  our  representative? 

18.  Does  he  prdTer  an  F.  O.  B.  price? 

The  concern  that  is  going  into  business  for  the  first  time  is 
most  particularly  in  need  of  field  investigation.  It  cannot  scatter 
its  shops  widely  across  the  country.  Its  limited  resources  nat- 
urally compel  it  to  concentrate,  and  just  where  to  concentrate 
is  a  matter  of  dollars  and  cents  of  difference.  The  makers  of  a 
new  line  recently  had  field  investigators  determine  who  were  the 
best  possible  buyers  for  such  a  product  and  where  they  were  lo- 


ADVANCE  m  METHODS  OF  ANALYSIS   33S 

cated.  These  investigators,  unknown  to  each  other,  and  in 
points  scattered  all  over  the  country,  reported  in  such  a  large 
number  to  the  effect  that  the  factory  operatives  and  mechanics 
were  seemingly  the  easiest  and  most  numerous  buyers,  as  to 
make  it  evident  that  by  far  the  most  efficient  plan  to  get  sales 
started  at  least  cost  was  to  take  the  fifty  principal  manufactur- 
mg  cities  of  the  country  and  concentrate  upon  them. 

This  was  done,  and  the  business  is  going  along  very  well  indeed. 

In  another  case  an  entirely  new  product,  which  had  not  before 
been  trademarked,  was  put  out.  It  was  important  for  the 
manufacturer  to  know  how  the  trade  felt  about  it,  what  profit 
he  could  expect,  what  were  the  possible  points  of  resistance  and 
competition,  and  what  particular  channels  of  selling  would  prove 
easiest.  All  these  points  were  discovered  by  local  field  investi- 
gation. Reports  were  made  throughout  the  country  and  brought 
together  and  analyzed  at  the  home  office  of  this  company. 

In  still  another  case  a  large  company  was  about  to  put  out  a 
new  product.  The  field  investigation  showed  that  the  con- 
sumption of  this  article  was  so  small,  the  headway  which  the  one 
or  two  others  already  in  the  field  had  made  was  so  discouraging, 
and  the  loss  which  they  were  suffering  so  definite,  that  it  would 
be  impractical  for  some  years  to  push  the  article.  As  a  conse- 
quence of  this  report  from  local  field  investigators  throughout 
the  country,  the  company  decided  not  to  go  into  the  manufac- 
ture of  this  article  at  all. 

The  method  of  field  investigation  has  now  been  carefully 
developed.  Thorough-going  sales  generals  are  demanding  not 
only  the  more  obvious  kinds  of  information  from  the  field,  but 
also  very  minute  and  detailed  information.  Among  the  items 
they  are  looking  for  are: 

(1)  Information  as  to  whether  the  dealer  has  a  good,  medium, 
or  bad  location. 

(2)  Just  exactly  what  kind  of  a  business  he  does;  whether  he 
does  any  jobbing  or  has  any  country  or  outlying  trade. 

(3)  What  kind  of  windows  he  keeps;  what  degree  of  alertness 
his  clerks  display;  what  kind  of  bookkeeping  system  he  uses. 

(4)  Whatkindof  policies  he  has;  what  kind  of  advertising  he 
does  or  is  going  to  do;  what  his  average  yearly  advertising  and 
stock  turnover  amounts  to. 

(5)  Exactly  what  class  and  character  of  trade  he  caters  to. 
These  are  but  a  half-dozen  of  something  like  a  hundred  ques- 
tions which  are  put  to  dealers  by  the  most  careful  of  modem 


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334       ADVANCE  IN  METHODS  OF  ANALYSIS 

sales  generals.  In  fact,  the  information  desired  is  so  thorough 
that  it  is  recognized  as  manifestly  impossible  and  impractical  to 
ask  mere  salesmen  to  collect  it,  as  they  would  be  devoting  all 
of  their  time  to  such  work  at  the  expense  of  their  selling. 

New  and  interesting  methods  are  used  to  systematize  and 
economize  in  the  handling  of  these  many  points  of  information 
about  a  local  dealer.  One  method  is  to  apply  a  symbolic  system 
of  letters,  or  numerals  and  letters  mixed,  to  indicate  by  a  sort  of 
shorthand  the  answers  to  the  questions,  so  as  to  save  the  time 
of  the  investigator  or  salesman. 

The  other  is  by  far  the  more  efficient  and  modern  way,  as  yet 
but  little  practised,  although  at  least  one  house  has  already  used 
it  successfully.  It  has  put  all  the  questions  on  a  single  sheet. 
The  investigator  checks  up  these  questions,  and  then  passes 
them  in  to  the  home  office  where  an  operator  of  a  punched  card 
tabulating  machine  takes  a  special  card,  laid  out  with  "fields" 
to  fit  the  case,  and  punches  these  cards  according  to  a  code  sys- 
tem. Thus,  whenever  it  is  desired  to  know,  for  instance,  how 
many  and  who  are  the  retailers  who  have  corner  locations,  it 
would  be  necessary  only  to  dump  all  the  cards  into  the  hopper, 
and  this  card  tabulating  machine  (the  type  of  machine  which 
has  reduced  the  time  of  government  census-taking  from  ten  years 
to  ten  months,  has  the  job  finished,  and  the  information  is  fur- 
nished. 

HIS  ATTITTJDE  TOWARD  OUB  PBODUCTS 

1.  How  long  has  he  handled  our  line? 

2.  Is  he  satisfied  with  treatment  received? 

8.  What  is  his  opinion  of  our  products,  as  compared  with  similar  goods? 

4.  Is  his  profit  on  our  goods  as  much  as  on  other  goods  he  handles? 

5.  As  much  as  on  competitive  lines? 

6.  What  class  of  trade  does  he  sell  our  goods  to — rich,  medium,  or  poor,  or 
any  specific  class  (like  professional  persons,  etc.)? 

7.  What  talking  points  does  he  use  in  selling  our  goods? 

8.  Are  our  goods  best  sellers  for  him?    Name  competitive  lines  he  carries  in 
order  of  demand. 

9.  Does  he  push  our  goods  m  preference  to  others?    What  goods  does  he 
boost? 

10.  What  is  his  opinion  of  our  advertising? 

11.  What  are  his  recommendations? 

12.  Does  he  co-operate  by  displaying  our  advertising  material? 

13.  Is  he  willing  to  do  any  local  advertising? 

14.  What  co-operation  is  he  receiving  from  our  competitors? 

15.  Is  his  demand  for  our  class  of  products  decreasing  or  increasing? 

16.  Why? 

17.  Has  he  sold  our  goods  and  later  dropped  them?    Why? 


ADVANCE  IN  METHODS  OF  ANALYSIS        335 

Also  by  putting  the  names  and  addresses  of  the  dealers  on 
these  special  punch  cards,  a  continuous  ready  card-filing  system 
IS  had,  with  all  the  punches  required  to  indicate  the  answers  to 
the  many  questions.  If  information  is  desired  regarding  any 
one  or  more  of  them,  it  is  merely  necessary  to  dump  all  of  the 
cards  m  the  hopper  and  they  can  be  segregated  according  to  any 
group.  •^ 

In  the  same  way,  and  by  the  same  means,  the  sales  of  any  con- 
cern may  be  analyzed  in  order  to  provide  more  interesting  and 
significant  data.  Marshall  Field  &  Company  can,  by  the  use  of 
these  machines,  tell  the  next  morning  just  how  many  sales  were 
made  C.  O.  D.;  how  many  were  made  by  any  one  salesperson- 
how  many  were  delivered  within  the  city  and  how  many  in  the 
country,  and  other  additional  details.  Similarly,  a  great  dry- 
goods  house  is  able  to  tell  which  classes  of  fabrics  in  a  day's 
business  were  given  the  greatest  preference.  Indeed,  a  hundred 
and  one  angles,  which  are  of  vital  interest  in  the  more  modem 
plan  of  closely  analyzing  sales  problems,  can  be  secured  by  means 
of  such  records. 

In  the  large  variety  of  information  which  business  concerns 
are  laying  themselves  out  to  get  in  order  better  to  analyze  their 
fields  these  are  the  most  important: 

(1)  Finding  out  and  listing  the  competitive  brands  in  their 
order  of  preference  in  any  part  of  the  country. 

(2)  Checking  the  work  of  branch  houses  or  salesmen  in  their 
districts  in  order  to  discover  reasons  for  unusual  conditions. 

(3)  Sounding  out  dealer  sentiment  concerning  new  proposi- 
tions; study mg  the  retail  and  local  situation  generally. 

(4)  Fmding  out  the  name  of  the  jobber  with  whom  the  retailer 
deals;  finding  out  the  dealer  handhng  your  goods  if  you  sell 
through  jobbers;  finding  out  the  name  of  the  kind  of  retailer  to 
whom  you  most  desire  to  sell. 

(5)  Studying  local  consumption;  calling  on  consumers  for  sug- 
gestions; trying  out  a  line  of  argument. 

(6)  Securing  general  information  regarding  the  character  of 
the  people,  pay  days,  local  wealth  and  industry;  the  local  news- 
P^P^r  poster,  street-car  or  moving-picture  situation. 

With  all  this  information  at  his  side  and  thoroughly  indexed 
and  systematized,  the  modern  sales  manager  is  really  like  a  sales 
general  with  his  maps  before  him  and  the  field  definitely  charted 
and  pleated,  so  that  the  various  elements  cannot  get  away  from 
aim.    He  is  a  commander  of  sales  forces  in  a  sense  the  old  type 


I 


336       ADVANCE  IN  METHODS  OF  ANALYSIS 

sales  manager  never  was.  He  can,  with  some  semblance  of 
accuracy,  picture  the  conditions  in  any  city  in  which  any  fluctu- 
ation in  sales  occurs.  A  national  sales  organization  has  too 
many  thousands  of  dollars  at  stake  in  office  and  field,  to  *'  take 
a  chance"  on  guesswork.  It  cannot  go  far  wrong  with  the  new 
program:    First  find  out,  then  sell. 

A  short  time  ago  the  ice-cream  manufacturers  of  Chicago 
undertook  a  joint  plan  which  was  based  on  an  analytical  study 
of  the  capacity  of  Chicago  to  consume  ice  cream.  Cameron 
McPherson  describes  as  follows  some  of  the  points  in  connec- 
tion with  the  campaign: 

•During  the  last  week  of  April  50  per  cent,  more  ice  cream 
was  eaten  in  Chicago  than  during  the  same  week  last  year. 
Since  the  opening  of  the  season  the  normal  consumption  has 
increased  over  20  per  cent.,  according  to  manufacturers*  figures, 
and  it  is  believed  that  before  the  warm  weather  disappears 
Chicago's  per  capita  consumption  of  ice  cream  will  exceed  the 
two-and-one-half-gallon  mark  of  other  centres.  In  this  case  tlie 
three-million-gallon  output  of  last  year  will,  through  newspaper 
advertising,  jump  600,000  gallons  in  one  season. 

But  even  if  the  early  average  shouldn't  hold,  and  the  expecta- 
tions of  the  manufacturers  be  not  realized,  the  advertising 
campaign  is  none  the  less  interesting.  As  an  example  of  what 
can  be  accomplished  by  the  proper  use  of  facts  obtained  from 
a  preliminary  market  analysis  or  survey  it  is  suggestive  to 
advertising  men  in  every  line  of  business.  But  the  story  of 
the  campaign  will  be  especially  helpful  to  those  who  are  inter- 
ested in  getting  together  competitive  advertisers  with  a  view 
to  starting  co-operative  trade-extension  work. 

Theoretically  a  co-operative  campaign  is  simple.  As  a  matter 
of  fact  it  is  very  complex,  as  any  one  who  has  ever  tried  to 
promote  one  knows.  There  is  always  that  troublesome  problem 
of  getting  together  conflicting  and  warring  interests.  It  is 
hard  to  show  a  pro-rata  gain,  and  usually  difiicult  to  prove 
profit  in  proportion  to  investment,  for  in  co-operative  work  the 
prestige  and  good- will  value  of  the  advertising  is  usually  lost. 
But  all  these  obstacles,  as  well  as  others  brought  about  by  the 

*Pnnters  Ink\  May  20.  1915.  p.  33. 


ADVANCE  IN  METHODS  OF  ANALYSIS        337 

nature  of  the  product  and  market,  seem  to  have  been  overcome 
by  J.  R.  Hamilton  in  this  ice-cream  campaign. 

Mr.   Hamilton   was   at  one   time  Advertising  Manager  of 

Wanamaker's.     His   training  under  Mr.   Wanamaker   taught 

^    .  him  to  observe  certain  principles  which  many  of  us 

^'^Basic     overlook  in  planning  campaigns.     First,  it  should  be 

Figures  determined  if  the  product  will  respond  to  advertising, 
then  a  survey  of  the  market  should  be  made.  Mr. 
Hamilton  realized  that  facts  and  figures  were  the  only  things 
that  would  influence  the  type  of  men  he  must  approach  and 
cause  them  to  invest  money  in  advertising.  These  figures  must 
absolutely  prove  that  the  consumption  of  ice  cream  could  be 
increased  to  a  point  where  it  would  pay  these  manufacturers  to 
appropriate  a  certain  percentage  of  their  gross  for  a  year's 
campaign.  Unless  the  matter  could  be  put  before  them  in  that 
light  it  was  better  to  discard  the  idea  at  the  outset. 

"The  first  thing  to  investigate,"  said  Mr.  Hamilton  to  a 
representative  of  Printers*  Ink,  "is  the  advertisability  of  the 
product.  The  rule  for  that  at  Wanamaker's  is  to  gauge  the 
natural  demand.  It  is  usually  safe  to  figure  that  a  product 
which  people  come  into  the  store  to  buy  voluntarily  in  ever- 
increasing  numbers  is  a  good  article  to  advertise.  It  is  the 
old  maxim  that  it  costs  less  to  sell  the  people  something  they 
want  than  to  sell  them  something  you  want  them  to  buy. 

"The  government  figures  showed  that  the  natural  increase 

in  the  consumption  of  ice  cream  in  the  last  four  years  had  been 

500  per  cent.     This  increase  had  not  been  forced, 

JorMver-  ^^^^^^e  with  a  few  scattered  exceptions  ice  cream 

tinability  ^^^  ^^^  h^^n  aggressively  advertised.     So,  then,  in 

ice  cream  we  had  a  product  which  answered  to  the 

merchandising  rule  so  far  as  advertisability  is  concerned.     Now 

what  was  the  market  condition  in  Chicago.^ 

"Here  again  government  figures  helped  me.  I  found  the 
per  capita  consumption  in  Chicago  about  one  and  one  half 
gallons  as  compared  with  the  two-and-one-half-gallon  average 
of  other  cities.  I  also  found  that  the  percentage  of  increase  of 
consumption  in  Chicago  had  been  less  than  in  other  cities.  So 
evidently  the  market  was  right.  But  there  must  be  a  reason 
for  everything;  why  had  Chicago  fallen  behind  in  the  con- 
sumption of  ice  cream  .^ 

"To  find  this  out  I  undertook  a  trade  investigation  and  called 
on  several  hundred  druggists  and  dealers.    This  survey  devel- 


888       ADVANCE  IN  METHODS  OF  ANALYSIS 


oped  the  fact  that  there  was  a  general  lack  of  knowledge  as  to 
the  food  value  of  ice  cream  by  those  who  sold  it,  and  that  instead 
of  being  sold  and  eaten  largely  as  a  food  it  was  marketed  in 
Chicago  as  a  luxury.  This  took  me  to  the  offices  of  the  Illinois 
State  Food  Commission,  which  gave  me  much  valuable  data 
about  the  food  value  of  ice  cream.  For  example,  it  prepared 
an  analysis  which  pro\'ed  that  a  quart  of  ice  cream  has  the 
same  food  value  as  a  pound  and  a  half  of  round  steak,  as  a 
whole  gallon  of  oysters,  as  four  pounds  of  potatoes,  or  eleven 
pounds  of  cabbage.  Further  analysis  developed  that  ice  cream, 
being  rich  in  proteins  and  caseins,  is  a  great  tissue-builder, 
while  its  sugar  and  cream  furnish  heat  and  energy  to  the  body, 
thus  making  a  well-balanced  ration.  This  was  aU  interesting; 
all  ammunition  which  would  come  in  mighty  handy  later  on. 

**In  getting  around  among  the  housewives  I  gathered  figures 
as  to  the  percentage  which  allowed  their  children  to  have  all  the 
ice  cream  they  wanted.  This  line  of  questioning  brought  out 
another  important  reason  for  the  hindered  increase  in  consump- 
tion  of  ice  cream — the  average  mother  labored  under  the  de- 
lusion that  anything  the  child  liked  was  bad  for  it.  It  was  a 
hand-me-down  from  the  old  Puritan  theory  that  there  should 
be  no  joy  in  life;  that  what  we  liked  to  do  we  should  carefully 
refrain  from  doing.  Here  was  a  consumer  condition  that 
needed  correction. 

"Armed  with  these  facts  about  Chicago  trade  conditions,  I 

secured  an  interview  with  the  larger  manufacturers.     I  pointed 

fly^      out  to  them  that  their  present  sales  methods  were 

Makers  incomplete.  They  were  simply  switching  portions  of 
Were  Ap-  a  stationary  demand  from  one  to  the  other.    They 

proached  y^^^e  engaged  in  a  price  war  that  was  taking  them 
down  instead  of  up.  Price-fighting,  I  argued,  was  akin  to 
prize-fighting  in  that  somebody  always  got  knocked  out.  It 
usually  led  to  cutting  prices  and  then  cutting  quality,  repeating 
the  process  until  the  inevitable  happened.  A  more  logical  way 
was  to  get  together  and  increase  the  local  per  capita  consumption 
of  ice  cream.  My  figures  proved  that  Chicago  was  not  eating 
its  share  of  ice  cream,  and  the  investigation  showed  that  the 
reason  it  was  lagging  behind  was  due  to  ignorance.  Educational 
methods  of  selUng  must  take  the  place  of  price-cutting,  and  then 
the  rest  would  come  easy." 

Six  of  the  leading  manufacturers,  making  80  per  cent,  of 
the  possible  output,  fell  in  with  Mr.  Hamilton *s  plan.    The  six 


ADVANCE  IN  METHODS  OF  ANALYSIS        SS9 


who  carried  the  load  were  McBride  Brothers  &  Knobbe,  Clover- 
dale  Creamery  Company,  Hydrox  Company,  John  T.  Cunning- 
ham, Thompson  &  Company,  and  Anderson  &  Goodman 
Company,  all  of  Chicago.  These  manufacturers  appropriated 
$10,000  for  a  newspaper  campaign,  using  all  the  Chicago  papers. 
This  initial  appropriation  was  to  be  increased  to  $50,000  if 
results  were  forthcoming. 

"The  first  difficulty  which  we  met  after  getting  under  way," 
continued  Mr.  Hamilton,  "was  that  the  manufacturers  on  the 
outside — the  *twenty-per-centers'  we  call  them — attempted  to 
steal  our  thunder.  One  of  them  went  so  far  as  to  send  out 
letters  to  the  trade  telling  dealers  to  paste  the  ads  in  their 
windows.  When  we  became  aware  of  this  the  question  came  up 
of  signing  the  ads,  something  which  we  had  not  done  for  fear 
it  would  create  a  wrong  impression  with  the  public,  and  because 
we  did  not  want  to  unnecessarily  antagonize  the  other  manufac- 
turers.    But  the  difficulty  was  met  in  an  even  more  effective  way. 

"A  window-paster  was  designed  and  furnished  to  dealers 

who  sold  the  ice  cream  of  manufacturers  participating  in  the 

SkuHing   campaign.     This  window-paster  was  copyrighted  and 

Out  the    a  notice  was  printed  on  it  forbidding  the  use  of  tie 

Twenty-  card  or  design  without  authority.  Then  space  was 
per-ceruere  bought  in  trade  papers  with  large  local  circulations. 
In  this  space  the  names  of  the  six  concerns  which  were  footing 
the  bills  were  published,  with  a  request  for  co-operation.  Of 
course,  this  was  a  delicate  thing  to  do,  without  giving  the 
impression  that  we  were  a  combination  of  big  manufacturers 
out  to  *get'  the  little  fellows,  but  the  copy  used  not  only 
accomplished  its  purpose  so  far  as  preventing  the  *  twenty-per- 
centers* from  capitalizing  our  efforts,  but  also  brought  a  marked 
response  from  the  druggists."    The  copy  was  as  follows: 

These  are  the  firms  who  are  spending  ten  thousand  dollars  in  the  ice-cream 
advertising  campaign  which  you  see  nmning  in  the  newspapers. 

They  are  spendmg  it  to  build  your  ice-cream  business,  and  they  are  wilUng  to 
spend  forty  thousand  dollars  more  if  the  druggists  and  other  ice-cream  dealers 
of  Chicago  will  co-operate. 

Be  sure  that  you  buy  your  cream  from  one  of  these  six  firms.  It  is  the  only 
fair  thing  to  do. 

If  this  campaign  continues  a  year,  it  will  double  your  ice-cream  business. 

But  it  won't  continue  unless  every  druggist  co-operates. 

Don't  wait  to  be  soUcited.  Pick  up  your  telephone  and  call  up  one  of  these 
SIX  firms  now.  Tell  them,  as  a  member  of  the  C.  R.  D.  A.,  that  you  appreciate 
what  they  are  doing  for  the  druggists  of  Chicago  and  want  to  show  your  appre- 
ciation by  giving  them  your  business. 


[J 


,1 

(i3 


91 


340       ADVANCE  IN  METHODS  OF  ANALYSIS 

In  the  newspaper  copy  itself  the  facts  which  were  used  to 
line  up  the  manufacturers  were  put  to  work  lining  up  the 
consumer.  The  opening  ad,  which  took  up  fifteen  inches  across 
three  columns,  exploited  the  fact  that  over  250,000,000  gallons 
of  ice  cream  were  eaten  in  the  United  States  last  year.  Then 
it  went  on  to  show  why.  Considerable  space  was  given  to  its 
food  properties  and  also  to  the  improved  sanitary  conditions 
under  which  it  must  now  be  made.  "And  after  you  have 
eaten  all  you  can  because  of  its  food  value  and  its  cheapness  and 
digestive  quality,"  urged  the  copy,  "then  order  another  plate 
because  you  like  it.    Here  is  one  case  where  that  which  tastes 

good  is  good."  11. 

The  following  ads— smaller  in  size— reviewed  the  situation, 
capitalizing  the  same  facts.  Throughout  the  campaign  the  use 
of  concrete  argument  was  most  noticeable,  and  therein  un- 
doubtedly lies  its  effectiveness.  In  fact,  the  whole  undertaking 
is  a  striking  demonstration  of  what  can  be  done  through  a 
careful  digging  for  facts  and  then  using  them  to  best  advantage. 
There  are  any  number  of  other  products  about  which  equally 
startling  facts  might  be  obtained,  and  which  might  be  exploited 
through  a  similar  co-operative  campaign.  There  is  no  question 
that  the  modern  tendency  in  business  is  along  co-operative 
lines,  and  business  men  are  coming  to  realize  that  co-operation 
will  accomplish  mo're  than  destructive  price-fighting.  This  con- 
dition lends  itself  to  campaigns  designed  to  increase  the  per  cap- 
ita consumption  of  a  product,  such  as  Chicago's  "Eat  More 
Ice-cream"  campaign  here  outlined. 

3.   THE  USE  OF  ANALYTICAL  METHODS  IN  ADVERTISING 

PROBLEMS 

RoUin  B.  Custer  has  written  the  following  exposition  of  some 
of  the  ways  in  which  the  plotting  of  sales  curves  may  be  em- 
ployed by  the  advertising  manager  in  laying  out  his  work: 

*When  the  advertising  manager  engaged  in  general  publicity 
work  ceases  to  consider  as  highly  important  the  number  of 
coupons  and  keyed  replies  received,  and  rivets  his  attention  on 
the  daily,  weekly,  or  monthly  sales  reports,  he  has  taken  a  long 
step  in  advance. 


'Advtrfinvg  and  SeUing,  June,  1915,  p.  8. 


ADVANCE  IN  METHODS  OF  ANALYSIS       341 

His  business  is  solely  to  increase  sales  and  his  work  is  a 
failure  if  he  has  not  done  so,  even  though  the  correspondence 
department  is  working  overtime  answering  the  inquiries  he  has 
created. 

Hence  the  advertising  manager  should  give  the  sales  of  the 
lines  he  is  advertising  careful  and  minute  study.  He  should 
know  from  week  to  week  whether  they  are  increasing  or  de- 
creasing; whether  there  are  definite  seasons  for  their  rise  and 
fall;  what  conditions  have  an  effect  on  them;  and,  especially, 
to  just  what  extent  the  various  methods  of  advertising  at  his 
disposal  can  influence  them. 

A  study  of  this  kind  is  greatly  facilitated  if  the  weekly  or 
monthly  figures  are  plotted  into  curves.  The  significance  of  a 
whole  column  of  figures  is  very  difficult  to  grasp,  as  only  three 
or  four  can  be  comprehended  at  a  time;  the  mind  is  confused 
by  the  inevitable  variations  between  consecutive  items,  so  that 
general  tendencies,  and  especially  periodic  or  seasonable  move- 
ments, are  quite  apt  to  be  obscured. 

This  point  is  well  illustrated  by  the  experience  of  the  adver- 
tising manager  of  an  agricultural  implement  manufacturer. 

In  September,  1914,  he  had  conducted  a  campaign  on  a 
machine  used  by  city  milk  dealers,  and  although  he  had  watched 
results  carefully,  he  began  to  feel  by  January,  1915,  that  it  had 
been  a  failure.  Nowhere  could  he  lay  his  finger  on  returns 
sufficient  to  justify  the  expense  incurred.  Direct  inquiries  had 
been  too  few  to  mention,  and  the  salesmen  were  neither  en- 
thusiastic nor  encouraging. 

And  yet  the  line  had  appeared  to  offer  possibilities.  It  was 
new  and  would  only  be  bought  after  the  prospect  was  thor- 
oughly educated  to  its  advantages.  It  had  never  been  adver- 
tised, but  the  salesmen  had  been  disposing  of  fair  amounts  for 
nearly  a  year.  It  seemed  certain  that  an  educational  campaign 
would  be  profitable. 

Circular  letters  were  used,  because  no  magazines  would 
reach  this  restricted  class  of  prospects  without  large  waste 
circulation,  while,  on  the  other  hand,  their  names  were  easily 
secured  from  business  directories.  The  campaign  consisted  of 
two  letters:  one  described  the  usefulness  of  the  machine,  and 
contained  a  booklet  giving  full  details  of  operation,  economies 
effected;  the  other  letter  emphasized  the  merits  of  the  particular 
make  of  machine  being  advertised.  Each  salesman  was  pro- 
vided with  a  list  of  persons  to  whom  letters  were  sent  in  his 


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Sales  curves  over  a  period  of  years.     The  letters  A,  B,  C,  etc.,  indi«ate  dif- 
ferent tvDes  of  advertising  effort  which  are  explained  in  this  article. 


ADVANCE  IN  METHODS  OF  ANALYSIS        S45 

territory,  and  was  to  follow  them  up  in  person.  To  establish 
leads  each  letter  contained  a  return  postcard  requesting  a 
salesman  to  call. 

As  has  been  said,  very  few  of  these  cards  came  back,  and  the 
salesmen  were  pessimistic  in  their  reports  as  to  the  value  of  the 
advertising.  The  disconcerted  advertising  manager  turned  to 
the  sales  reports,  but  these  gave  him  little  comfort.  In  round 
numbers  the  figures  were  as  follows: 

Date  Sales 

October,  1913 $500 

November    150 

December 350 

January,  1914 .' ...............  500 

February i^qoo 

^arch 1^600 

April 900 

May    300 

June    ijoO 

July 750 

August    550 

September   i^oOO 

October goo 

November *    ]  ]  1,900 

December 900 

January,  1915 1,350 

The  campaign,  it  will  be  remembered,  was  run  in  September, 
1914,  and  in  October  the  sales  fell  off.  November  was  a  good 
month,  but  there  was  nothing  remarkable  about  either  Decem- 
ber or  January,  each  having  been  previously  exceeded. 

Later  reports  showed: 

February.  1915 $2,900 

March 3,200 

These  figures  were  very  much  better,  but  the  advertising 
manager  felt  he  could  hardly  claim  credit  for  results  obtained 
six  months  after  his  work  was  done.  It  occurred  to  him, 
however,  to  draw  a  curve  from  these  figures,  and  its  revelations 
literally  astonished  him. 

Fig.  1  shows  this  curve  with  the  date  of  the  campaign  indicated 
at  the  point  x.  It  is  at  once  evident  that,  prior  to  the  adver- 
tising campaign,  sales  were  tending  to  fall  off,  but  that  after- 
ward they  were  abruptly  increased,  and  that  sales  in  February 
and  March  formed  part  of  the  general  upward  movement — a 


I 


ii' 


844       ADVANCE  IN  METHODS  OF  ANALYSIS  j 

fact  that  an  inspection  of  the  figures  themselves  failed  to  show. 
That  the  advertising  campaign  was  the  actual  cause  of  the 
increase  is  not  proved  by  the  curve,  but  a  careful  investigation 
revealed  no  other  factor  competent  to  produce  this  result. 
Hence  the  following  interpretation  of  the  curve  seemed  justified : 

The  advertising  campaign,  while  powerless  to  cause  action 
by  itself,  had  either  made  the  salesmen's  work  much  easier  for 
them  or  had  stimulated  them  to  greater  efforts — in  either  case 
it  was  worth  while,  and  probably  both  effects  had  taken  place. 

Since  it  took  some  time  for  the  salesmen  to  cover  the  ground, 
more  than  one  call  was  necessary  in  many  cases;  several  months 
were  required  before  the  full  benefits  of  the  campaign  were  felt. 
The  peak  in  November  is  probably  due  to  the  clearing  up  of 
prospects  who  had  previously  been  hanging  fire. 

Curves  such  as  this  enable  the  advertising  manager  to  form  a 
clear  conception  of  what  his  advertising  is  doing.  He  can  note 
the  effect  of  each  campaign,  the  time  required  to  produce  results, 
and  the  time  during  which  results  continue  to  be  produced. 
The  active  and  dull  periods  for  seasonable  goods  are  clearly 
marked,  and  the  date  to  begin  active  advertising  is  exactly 
indicated.  An  unusual  sagging  of  the  curve  is  a  danger  signal, 
and  if  persistent  is  a  warning — the  publicity  must  be  increased 
or  its  character  changed. 

Curve  No.  2  shows  how  the  advertising  manager  can  keep  his 
fingers  on  the  pulse  of  a  commodity's  sales  and  administer  stim- 
ulants as  required. 

The  article  in  question  is  a  small  machine  made  by  a  hardware 
manufacturer,  sold  by  dealers,  and  used  by  women  in  household 
work. 

The  manufacturer  devoted  most  of  his  publicity  to  establishing 
his  trademark,  which  covered  a  very  extensive  and  varied  line, 
so  that  the  individual  items  received  little  consistent  treatment, 
as  the  history  of  this  particular  one  shows. 

This  drive  was  placed  on  the  market  in  December,  1908,  and 
for  several  months  was  sold  to  dealers  without  advertising.  In 
May,  1909  (point  A  on  the  curve),  an  attractive  folder  was  pub- 
lished, which  was  given  to  dealers  for  distribution  to  their  cus- 
tomers. That  this  method  of  advertising  was  effective  is  shown 
by  the  fact  that  the  sales  promptly  rose  above  the  $1,500  mark 
and  stayed  there  for  over  a  year  and  a  half.  It  is  a  fair  inference 
that  this  period  represents  the  useful  life  of  the  folder. 

In  June,  1911  (point  B),  after  a  slump  in  the  sales,  a  half-page 


f 


ADVANCE  IN  METHODS  OF  ANALYSIS        345 

advertisement  was  run  in  a  large  national  weekly.  An  increase 
in  the  sales  promptly  followed,  which  lasted  for  four  months. 

After  the  sales  had  remained  below  $1,500  for  about  six  months 
another  boost  was  made  in  June,  1912  (point  C) .  This  consisted 
of  a  new  dealer  folder  and  advertisements  in  several  of  the 
women's  magazines.  Up  went  the  sales  again,  but  after  a  year 
and  a  half  all  virtually  became  lost,  and  the  sales  slid  rapidly 
down  toward  extinction. 

There  is  no  doubt  but  that  further  publicity  would  have 
brought  the  curve  up  again,  but  the  manufacturer  decided  to 
abandon  this  item  in  favor  of  an  improved  model,  so  it  was  left 
to  its  fate. 

With  a  curve  such  as  this  before  him,  the  advertising  manager 
is  in  a  position  to  predict  with  some  degree  of  accuracy  what 
results  can  be  expected  from  a  given  form  of  advertising,  and  he 
is  also  able  to  compare  his  advertising  cost  with  the  results  se- 
cured, and  thus  determine  the  eflSciency  of  his  methods. 

He  must,  however,  constantly  remember  that  an  increase  of 
sales  following  an  advertising  campaign  is  no  proof  that  the 
campaign  caused  the  increase.  He  must,  therefore,  keep  thor- 
oughly informed  on  all  other  factors  that  might  affect  sales — 
general  business  conditions,  competition,  etc. — and  determine 
as  far  as  possible  what  effect  these  have  had  on  his  curve. 
Otherwise  his  attempts  at  prophesying  for  the  future  may  prove 
disastrous  failures. 

It  would  be  impossible  to  discuss  in  a  compilation  of  this  sort 
more  than  a  few  of  the  more  suggestive  methods  by  which  analy- 
sis can  be  employed  in  handling  the  advertising  end  of  sales 
campaigns.  One  of  the  uses  to  which  it  is  being  put  with  great- 
est success  is  in  testing  demand,  and  the  variations  of  this  use 
suggest  large  possibilities  for  its  profitable  employment  as 
methods  of  analysis  become  perfected.  The  following  discussion 
from  Printers'  Ink  shows  how  the  method  has  been  used  in  one 
or  two  cases  recently: 

*The  manufacturers  of  a  cleansing  and  polishing  compound 
had  always  put  it  up  in  cakes.     After  some  years  of  success  they 

*Print€rs'  Ink,  April  8,  1»15,  p.  92. 


t'. 


846       ADVANCE  IN  METHODS  OF  .iN/VLYSIS 

decided  to  add  a  powdered  form  of  the  product  to  meet  a  sup- 
posed demand  for  it.  They  would  have  liked  to  know,  before 
committing  themselves  to  an  advertising  campaign, 
^Ito^^^  just  how  much  demand.     Incidental  but  quite  as  im- 

Demand  portant  was  the  question  of  where  the  demand  would 
come  from,  whether  from  a  latent  interest  in  cleansers 
and  polishes  in  general,  or  from  competitive  products,  or  from 
their  own  cake. 

It  made  a  difference,  certainly,  which  of  these  was  the  real 
source,  and  touched  the  heart  of  the  business 's  good  will.  Sup- 
pose they  went  out  and  advertised  the  powder  heavily,  only  to 
find  that  the  powder  market  was  a  harder  and  no  more  desirable 
one  than  that  they  already  had.  Perhaps  it  would  cost  more  to 
get  new  business  there  than  the  same  expenditure  would  get  for 
the  cake.  It  would  be  a  serious  thing  if  the  effect  of  the  adver- 
tising should  be  simply  to  transfer  a  large  part  of  the  demand  for 
the  cake  over  to  the  powder,  and  run  the  chance  of  having  it 
stolen  away  by  other  cleansing  powder  manufacturers  who  had 
occupied  that  part  of  the  field  longer.  In  that  event,  the  new 
product  would  be  a  leak  instead  of  a  business  getter. 

That  evil  result  would  not  follow  if  the  demand  were  allowed 
to  develop  naturally,  or  if  the  powder  were  advertised  in  the 
right  way  in  connection  with  the  older  product,  showing  for 
what  purposes  the  cake  was  better  or  handier,  and  for  what  the 
powder  was  best.  It  would  save  a  lot  of  time,  money,  and  dubi- 
tation  to  find  out  at  the  start.     But  how? 

The  Bon  Ami  Company  may  not  have  had  precisely  these 
questions  in  mind,  but  its  problem  was  the  same.  And  it  set 
out  to  find  out  the  answer.  It  has  always  been  a  great  believer 
in  putting  a  question  up  to  the  consumer.  It  has  advertised 
for  "new  uses"  and  knows  what  an  interest  the  housewife  takes 
in  such  questions.  It  is  still  paying  two  dollars  for  every  new 
use  and  has  paid  as  much  as  $50  for  an  unusually  good  suggestion 
of  a  new  use. 

With  this  experience  the  company  decided  to  offer  a  series  of 
prizes,  $2,^0  in  all,  for  the  best  uses,  not  necessarily  new  uses, 
of  the  two  kinds  of  products.  The  best  uses  of  the  cake  and  the 
best  uses  of  the  powder  were  sought,  in  the  order  of  their  useful- 
ness. The  advertisement  appeared  in  the  April  magazines,  and 
the  deluge  of  repHes  has  begun. 

Already  the  importance  of  the  investigation  by  publicity  is 
being  demonstrated.    The  oflSce  had  been  in  a  quandary  about 


ADVANCE  IN  METHODS  OF  ANALYSIS       317 


the  sifter  hole  in  the  top  of  the  can  of  powder,  as  to  whether  it 
was  not  too  small  or  properly  placed.  It  seemed  a  point  of  great 
practical  moment  and  there  were  expected  to  be  a  good  many 
complaints  about  it.  But  none  of  the  first  thousand  or  so  letters 
have  mentioned  the  sifter  hole,  and  it  appears  to  be  nothing  to 
worry  about;  it  can  be  dismissed  from  attention.  Other  sur- 
prises are  probably  in  order  when  the  25,000  or  30,000  lists  that 
are  expected  shall  be  classified  and  the  uses  compared. 

Consumer  investigations  of  this  sort,  through  publicity,  are 
much  rarer  than  they  might  be.  There  is  no  end  to  the  contests 
for  an  appropriate  name  for  a  product,  for  a  slogan,  catch-phrase, 
or  trademark,  either  with  a  view  to  publicity  or  to  get  names  of 
dealers,  or  to  distribute  samples.  But  there  seems  to  be  an 
opportunity  in  the  idea  for  straight  investigation  on  a  larger  scale 
than  has  been  done  before.  Trying  it  out  on  a  few  dozen  or  hun- 
dred people  cannot  compare  for  certainty  with  a  test  on  25,000. 

When  we  come  to  the  more  strictly  advertising  problems,  we 
find  the  value  for  the  use  of  analytical  methods  even  more 
specific  than  it  is  in  the  case  of  market  studies,  because  here  it  is 
possible  to  work  out  results  with  a  comparatively  high  degree  of 
certainty.  The  following  articles  present  various  sides  of  the 
question  of  using  analytical  methods  in  determining  the  amount 
of  advertising  appropriation.  This  is  one  of  the  favorite  grounds 
for  dispute  among  advertising  men,  and  these  articles  illustrate 
something  of  the  variety  of  opinion  which  prevails  as  to  what 
figures  and  what  other  data  are  best  and  safest  to  employ  as  a 
basis  for  calculating  the  appropriation.  This  variety  of  opinion 
serves  as  a  good  illustration  of  how  far  analytical  methods  in 
advertising  still  are  from  being  completely  codified: 

[Editorial  Note:  It  goes  vnihout  saying  that  advertising 
results  cannot  be  bought  at  so  much  per  unit.  An  appropriation  of 
$100,000  vnll  buy  a  certain  definite  capacity  in  horsepower  or  hilo- 
waits,  when  invested  in  a  power  planty  but  when  it  is  to  be  invested 
for  advertising  no  man  can  tell  just  exactly  what  it  will  buy  in  terms 
of  results.  For  thai  reason  an  advertising  appropriation  is  often 
determined  by  compromise  rather  than  by  agreement.  The  lack  of 
a  definite  basis  upon  which  to  figure  the  amount  makes  one  man^s 


I 


S48       ADVANCE  IN  METHODS  OF  ANALYSIS 

guess  seem  as  good  as  another's^  and  unless  somebody  comes  forward 
vnth  a  logical  reason  for  basing  it  upon  a  percentage  of  the  gross  sales 
or  upon  the  population  in  the  territory  to  be  reached,  or  upon  some 
other  definite  object,  the  appropriation  is  likely  to  be  the  result  of 
pure  compromise. 

*' Printers*  Ink**  has  believed  for  a  long  tim£  that  some  logical  basis 
far  determining  the  advertising  appropriation  could  be  tvorked  out 
in  any  business.  That  is  not  to  say  that  the  same  basis  ivould  be 
satisfactory  for  every  business,  nor  that  any  definite  ** rules**  can 
be  laid  down.  Two  concerns  in  the  same  line  of  business  might  find 
it  advisable  to  base  their  appropriations  upon  totally  different  con- 
siderations. Changing  conditions  might  necessitate  a  change  in 
the  whole  method  of  figuring  the  appropriation  for  the  same  concern. 
But  we  firmly  believe  that  the  appropriation  can  be — and  should  be 
— based  upon  agreement  instead  of  compromise.  That  implies, 
of  course,  a  definite  basis  which  shall  be  determined  according  to  the 
experience  and  to  fit  the  needs  of  each  individual  advertiser. 

Though  it  is  manifestly  impossible  to  lay  down  any  hard  and 
fast  rules  as  to  what  the  basis  shall  be,  it  is  possible  to  point  out  the 
process  of  reasoning  by  which  the  basis  is  to  be  arrived  at,  and  to 
cite,  by  way  of  iUnstration,  the  experierice  of  advertisers  who  have 
worked  out  the  problem  for  themselves.  To  that  end  a  number  of  the 
leading  advertising  agents  have  been  qtiestioned,  and  their  vieics  are 
incorporated  in  the  discussion  which  follows.  We  have  also  collected 
a  large  amount  of  material  from  articles  which  have  been  published 
in  '^Printers*  Ink**  and  elsewhere.  The  following  articles  are  an 
attempt  to  reflect,  in  workable  form,  the  best  thought  on  the  s^ibject 
of  fixing  the  advertising  appropriation — Ed.  Printers*  Ink.] 

*Some  advertising  appropriations  are  based  upon  a  fixed  per- 
centage of  last  year's  gross  sales.  Others  are  based  on  a  per- 
centage of  last  year's  profits.  Some  are  based  upon  the  number 
of  possible  buyers  in  the  territory  which  is  to  be  reached.  Others 
are  based  upon  the  saving  which  is  effected  through  increased 
volume  of  production.  Still  others  are  determined  with  refer- 
ence to  the  decrease  in  selling  cost  through  salesmen  alone.  Yet 
others  are  fixed  by  the  sales  quotas  for  next  year.  And  some, 
aJas,  go  according  to  the  idiosyncrasies  of  the  board  of  directors. 

Excepting  the  last  named,  there  is  every  reason  to  believe  that 
each  of  those  methods  works  well  under  certain  conditions  and  is 


^Pnntera*  Ink,  February  11.  1915,  p.  17. 


ADVANCE  IN  METHODS  OF  ANALYSIS       349 

fully  justified  by  its  results.  The  advocates  of  any  one  of  them 
(except  the  last  again)  can  give  you  any  number  of  good  and 
sufficient  reasons  why  it  is  exactly  the  method  which  ought  to 
be  followed  in  the  particular  case  which  is  under  discussion.  So 
there  is  no  opportunity  to  hold  one  system  up  as  better  than  the 
rest.  But  it  is  worthy  of  special  emphasis,  right  at  the  start, 
that  every  one  of  those  methods  has  been  evolved  from  a  study 
of  actual  marketing  conditions.  As  J.  J.  Geisinger,  of  the  Federal 
Advertising  Agency,  New  York,  puts  it: 

"There  can  be  no  fixed  ratio  of  advertising  investment  for  all 
lines  of  business,  or  even  for  similar  lines  of  business.  There  are 
too  many  determining  factors  to  be  considered,  weighed,  ana- 
lyzed, and  dissected,  such  as: 

Quality  cX  the  product. 

Cost  and  marketing  price. 

Necessity  or  luxury. 

Trade  conditions  aflfccting  the  product. 

Existing  competition  or  possible  competition. 

The  necessity  of  acquaintance  advertising. 

Possible  per  capita  sale. 

Life  of  product. 

Rapidity  of  consumption. 

Change  of  fashion  or  condition. 

Seasonable  or  constant  demand. 

Intermittent  or  regular  demand. 

Sales  support  of  the  advertising. 

Territory  boundaries  controlled  by  shipping  expenses  or  other  conditions. 

Whether  there  is  a  general  Une  that  would  derive  benefit  from  the  advertis- 
ing of  a  single  specialty,  as  there  is  with  Keen  Kutter  Pocket  Knives  and 
Heinz  Ketchup. 

A  subsidiary  sale  to  depend  upon  as  in  Talking  Machines  and  Safety  Razors. 

The  necessity  of  maintaining  demand  already  created  as  well  as  creating 
new  demand. 


"It  is,  therefore,  my  contention  that  the  basis  of  an  advertis- 
ing investment  for  each  business  must  be  determined  by  an  actual 
study  of  that  business  and  that  all  set  rules  are  superficial." 

Perhaps  Mr.  Geisinger's  fist  would  not  be  complete  for  every 
case,  but  it  serves  to  show  the  sort  of  analysis  which  must  precede 
the  adoption  of  any  method  of  figuring  an  advertising  appropria- 
tion. Neglect  of  this  fundamental  analysis  often  involves  con- 
cerns in  trouble,  as  is  pointed  out  by  Robert  Tinsman,  president 
of  the  Federal  Agency. 

"It  needs  no  analysis,"  says  Mr.  Tinsman,  "to  show  why 
Postum,  which  is  made  of  roast  wheat  and  molasses,  can  afford 


i 


f 


850       ADV.iNCE  IN  METHODS  OF  ANALYSIS 

a  gigantic  appropriation;  and  a  natural  coffee  campaign,  based 
on  a  raw  product  subject  to  market  fluctuations,  must,  by  com- 
parison, afford  only  a  very  small  appropriation. 

'First,  let  me  say  that  I  agree  that  the  time  is  coming  when 
manufacturers  of  trademarked  goods  will  divide  the  dollar  more 
scientifically.  In  fact,  I  have  preached  from  the  beginning  that 
the  only  way  to  gauge  advertising  results  is  on  the  basis  of  net 
profits  per  dollar  spent, 

**For  example,  I  had  a  conference  some  time  ago  with  a  manu- 
facturer who  is  supposed  to  have  made  a  tremendous  *put  over' 
in  the  jewelry  trade. 

"All  advertising  men  agree  that  his  campaign  is  clever  beyond 
comparison.  Advance  distribution  was  secured  to  the  tune  of 
7,000  jewelers  before  the  advertising  appeared.  The  advertising 
was  apparently  a  big  *put  over*  because  the  article  secured  uni- 
versal demand  almost  as  quickly  as  it  had  secured  universal 
distribution.  But  the  manufacturer  soon  found  he  had  developed 
a  tail  to  his  business  dog  that  soon  threatened  to  wag  the  dog. 
The  part  of  his  business  developed  by  his  advertised  article 
was  only  a  specialty  part  after  all,  and  the  cultivation  of  this 
specialty  business  was  at  an  expense  that  did  not  permit  distri- 
bution oyer  his  entire  business,  because  the  other  unadvertised 
part  of  his  business  did  not  show  consequent  results. 

"  In  a  word,  the  increase  in  business  of  the  advertised  specialty 

made  him  overlook  the  fact  for  a  minute  that  the  increase  in  net 

Suffaee    profit  for  his  entire  business  did  not  agree  with  the 

Indications  showing  of  his  sales  sheet — that  is,  there  was  not  the 

Are  Mis-  proper  increase  relation  between  the  sales  and  the  net 

leaaing     ^^q^i 

"Consequently  the  stockholders  were  not  ready  to  agree  with 
the  advertising  manager  that  the  campaign  was  such  a  huge 
success  after  all. 

"The  thing  he  should  have  done  at  the  beginning  of  the  cam- 
Paign.  was  to  have  provided  for  an  increase  all  along  the  line  and 
the  distribution  of  the  advertising  expense  among  other  articles 
—not  on  a  single  specialty.  If  such  had  been  the  case  then  this 
campaign  would  not  have  to  undergo  a  reorganization  now  at  this 
late  date. 

"Surface  indications  in  advertising  are  very  often  misleading. 
For  example,  an  account  came  to  our  attention  recently  that  was 
a  model  apparently  for  copy  and  appearance,  but  investigation 
proved  that  the  trade  relation  end  of  the  campaign  had  been 


ADVANCE  IN  IVIETHODS  OF  ANALYSIS       351 

ignored  and  that  all  the  trade  or  salespeople  knew  about  the 
line  was  that  it  was  an  advertised  line  and  therefore  supposed  to 
be  better. 

"No  idea  of  the  selling  arguments  had  been  cultivated.  It 
was  a  case  of  blind  leading  the  blind  when  a  customer  would  ask 
a  clerk  why  she  should  buy  that  particular  advertised  article. 
It  needs  more  than  clever  copy  and  good  art  to  reduce  the  neces- 
sary percenta,ge  of  appropriation  to  a  point  within  reason. 

"  I  do  not  believe  that  it  is  possible  to  lay  down  any  set  rule 
for  percentage  of  appropriation.  It  varies  with  the  merchandise 
and  the  conditions  as  illustrated  in  the  Postum  case. 

"  Even  in  one  field  the  percentage  of  appropriation  will  vary. 
A  staple  silk,  for  example,  will  afford  a  very  small  margin,  while 
a  novelty  silk  on  which  the  profit  is  much  larger  will  permit  a 
liberal  percentage.  *  It  all  depends  * — that  is  the  only  rule  that 
can  govern  this  question. 

"At  the  beginning  of  the  campaign,  however,  this  point  should 
be  discussed  and  as  soon  as  possible  a  p)ercentage  of  appropria- 
tion fixed.  At  the  beginning,  when  it  is  necessary  to  establish  a 
brand  in  the  face  of  competition,  the  percentage  must  be  neces- 
sarily larger.  As  the  demand  begins  to  be  larger  this  percentage 
will  decrease  as  the  volume  increases.  I  have  in  mind  a  clothing 
account  which  started  on  a  5  per  cent,  appropriation  basis  and 
took  five  years  to  get  down  to  the  right  3  per  cent,  basis, 
which  is  the  legitimate  percentage  in  its  particular  field. 

"If  this  question  is  firmly  settled  in  the  advertiser's  mind, 
then  advertising  will  come  to  be  considered  as  a  legitimate  part 
of  the  cost  of  doing  business — ^an  investment  in  good  wiU  as 
necessary  to  the  dividend  power  of  the  business  as  selling  expense. 
That  is  what  we  are  trying  to  do  all  the  time,  and  as  we  succeed 
we  find  the  necessity  for  continuous  canvass  for  increased  appro- 
priations diminishing.  When  we  succeed,  the  advertising  appro- 
priation automatically  increases  with  the  percentage,  and  that 
is  an  end  mutually  desirable  with  the  advertiser  and  the  agent." 

Most  advertising  men  seem  to  agree  that  the  most  convenient 

way  of  designating  the  relative  size  of  an  appropriation  is  by 

means  of  its  ratio  with  the  gross  sales.     That,  however. 

Percentage  jg  g,  very  different  thing  from  the  statement  that  an 

Meamof  appropriation  should  be  fixed  at  a  definite  percentage 

Comparis(m  of  the  gross  sales.     Mr.  Tinsman  states  that  3  per 

cent,  is  a  legitimate  basis  in  the  clothing  field.     By 

that  he  means  that  under  normal  circumstances  a  well-estab- 


t 


« 


I 


il 


S5«       ADVANCE  IN  METHODS  OF  ANALYSIS 

lished  clothing  concern  should  not  need  to  appropriate  more  than 
3  per  cent,  of  its  gross  sales  in  order  to  maintain  its  standing 
in  the  trade.  He  does  not  claim  that  3  per  cent,  is  any  limit 
in  fixing  the  appropriation  for  a  new  concern,  or  for  an  estab- 
lished concern  under  exceptional  circumstances.  The  percent- 
age of  gross  sales  is  a  convenient  method  of  comparison,  rather 
than  a  hard  and  fast  rule  for  determining  what  an  appropriation 
shall  be. 

This  point  is  more  clearly  illustrated,  perhaps,  by  the  following 
letter  from  a  prominent  agent  who  asks  to  remain  anonymous: 

"The  percentage  of  money  devoted  to  advertising  should  de- 
pend entirely  and  directly  upon  the  precise  nature  of  the  job  to 
be  accomplished,  and  one  of  the  biggest  helps  that  a  real  adver- 
tising agency  can  give  to  a  client  is  on  this  very  point;  if  the  agent 
has  had  proper  experience  and  is  honest  and  applies  to  the  situa- 
tion the  same  tests  that  he  would  apply  if  he  owned  his  custom- 
er's business,  his  advice  should  be  of  incalculable  worth  to  the 
advertiser. 

"I  could  cite  scores  of  instances  of  how  we  arrived  at  certain 
appropriations,  but  the  conditions  governing  each  case  would 
be  highly  individual  and  would  furnish  no  basis  for  a  conclusion 
as  to  any  proper  specific  percentage  to  be  spent  by  the  general 
advertiser. 

"I  know  of  a  baby-carriage  manufacturer  who,  in  his  first 
year,  spent  10  per  cent,  of  his  sales  in  advertising,  but  in  his  third 
year  was  required  to  spend  only  7  per  cent,  to  do  practically 
three  times  as  much  business.  I  think  that  the  intelligent 
spending  of  the  10  per  cent,  the  first  year  has  a  great  deal  to  do 
with  the  fact  that  he  is  only  spending  7  per  cent,  and  still 
pushing  his  business  forward  so  vigorously  in  the  third  year. 

"I  know  of  a  quick-repeat  product,  used  by  practically  75  per 
cent,  of  the  adult  male  population  of  this  country,  where  2J 
per  cent,  is  considered  necessary  for  a  proper  and  adequate  ad- 
vertising budget;  but  I  know  of  another  product  in  an  exactly 
similar  class,  sold  to  the  same  class  of  trade,  but  confronted  by 
such  entirely  different  selling  conditions,  that  an  advertising  ap- 
propriation of  between  5  and  6  per  cent,  is  required. 

"I  have  in  mind  a  *  quality'  product,  finding  its  sale  only 
among  the  very  intelligent  and  well-to-do,  which  has  an  adver- 
tising expenditure  of  between  25  and  30  per  cent,  of  its  gross 
sales. 

"In  the  main,  I  agree  that  the  time  is  not  only  coming,  but 


f 


ADVANCE  IN  METHODS  OF  ANALYSIS        353 

that  it  is  here,  when  more  and  more  makers  of  trademarked 
goods  are  adopting  the  habit  of  looking  an  advertismg  dollar  m 
the  face  and  demanding  of  it  a  real  dollar's  job.  This  will,  m 
my  opinion,  be  done  more  mathematically  and  more  scientifi- 
cally in  the  future  than  is  now  the  case. 

"It  is  possible  in  this  advertising  business  to  prove  almost 
anything  that  one  sets  out  to  prove,  but  within  the  limitations  of 
my  experience  I  have  not  found  that  you  could  lay  down  very 
many  rules  concerning  advertising,  unless  you  are  equally  willing 
to  revoke  them  and  put  in  force  others  where  the  rules  have  been 

proved  wrong."  i.  i     • 

Of  course,  it  is  obvious  that  the  percentage  of  gross  sales  is  a 
perfectly  rational  method  of  expressing  the  work  which  the  ad- 
vertising has  done.  The  gross  sales  are  the  sum  total  of  the 
energy,  and  the  ratio  of  the  advertising  appropriation  to  that 
total  is  a  more  or  less  accurate  estimate  of  the  efficiency  of  the 
advertising.  But  it  seems  that  the  fixing  of  an  appropriation 
to  cover  a  future  period  must  depend  upon  many  considerations 
besides  the  mere  bulk  of  last  year's  gross  sales.  That  point  will 
be  discussed  further  in  the  article  which  is  to  follow. 

In  the  issue  of  Printers'  Ink  for  the  week  following  that  in 
which  this  article  appeared  there  was  printed  the  following 
further  discussion  of  the  question,  in  which  the  ground  was 
taken  by  some  of  the  writers  that  the  percentage  of  gross  sales 
is  an  unreasonable  basis  for  determining  the  appropriation, 
although  it  has  value  as  a  means  of  keeping  track  of  normal 
expenditures. 

♦As  was  stated  in  a  precedmg  article,  the  ratio  between  an 

advertising  appropriation  and  the  gross  sales  is  to  be  regarded  as 

^,   _    .     a  means  of  measuring  the  energy  put  into  the  ad- 

R /^^^  vertising  rather  than  a  criterion  by  which  future  ap- 
theAp^<^  propriations  are  inflexibly  to  be  fixed.     Even  m  the 

priaHon  department-store  field,  where  appropriations  are  most 
and  Gross  severely  judged  in  comparison  with  sales,  we  find  that 
^"^  outside  conditions  frequently  exert  most  profound  in- 
fluence upon  the  ratios.  W.  R.  Hotchkin,  of  the  Cheltenham 
Advertising  Service,  New  York,  and  formerly  Advertising  Man- 

*Pnnt€rs  Ink,  February  18,  1915,  p.  78. 


354        ADVANCE  IN  METHODS  OF  ANALYSIS 


*» 


I 


ager  of  Gimbel  Brothers*  and  Wanamaker's  New  York  stores, 
writes: 

"The  advertising  of  a  retail  store  can  be,  and  really  must  be, 
very  carefully  controlled,  and  kept  within  a  definite  percentage 
of  the  gross  sales,  and  so  far  as  I  have  any  knowledge,  this  i>er- 
eentage  is  always  figured  on  gross  sales. 

"At  Wanamaker's  for  many  years  we  took  a  pride  in  keeping 
the  percentage  of  advertising  cost  down  very  close  to  2  per  cent. 
of  the  gross  sales.  Of  recent  years  I  know  that  it  has  very  greatly 
advanced  at  Wanamaker's,  and  I  should  judge  that  toniay  it 
was  not  less  than  5  per  cent. 

"At  Gimbel  Brothers,  being  a  newer  store  where  the  promo- 
tion had  to  be  more  aggressive  in  anticipation  of  business  that 
had  to  be  made,  the  percentage  was  still  higher  than  at  Wana- 
maker's,  part  of  the  time  being  considerably  over  6  per 
cent. 

"I  find  that  most  stores  try  to  keep  their  percentage  of  adver- 
tising cost  down  to  the  neighborhood  of  3  per  cent.,  and  I  under- 
stand that  Marshall  Field  is  able  to  accomphsh  the  supreme 
achievement  of  doing  his  advertising  on  1  per  cent,  of  gross  sales, 
and  within  this  amount,  which  would  be  $500,000  on  a  business 
of  $50,000,000,  in  round  figures,  is  included  everything  that  is 
chargeable  to  advertising,  including  printed  matter  of  all  sorts, 
and  all  promotion  expenses. 

"When  we  consider  the  advertising  appropriations  of  manu- 
facturers, an  entirely  different  condition  exists.  A  great  many 
manufacturers  figure  their  advertising  as  a  very  large  part  of  the 
cost  of  the  article.  Take  a  tooth  paste,  for  instance,  the  list 
price  of  which  would  be  50c.  and  the  wholesale  price  $3.50  a 
dozen,  or  about  29c.  each.  The  actual  cost  of  the  article  perhaps 
is  5c.  to  7c.  This  item  is  representative  of  many  articles  bearing 
a  trademark  and  nationally  advertised,  and  it  would  admit  of 
the  manufacturer  spending  25  per  cent  of  his  entire  receipts  in 
exploiting  it. 

"Other  merchandise  of  a  more  staple  character,  such  as  rugs, 
shirts,  petticoats,  and  dress  fabrics  would  have  to  spend  a  very 
much  smaller  percentage.  In  fact,  I  should  judge  that  in  the 
neighborhood  of  5  per  cent,  would  be  as  much  as  most  of  them 
could  afford,  so  I  do  not  see  how  a  percentage  rule  could  be  ap- 
plied generally.  Each  manufacturer  would  have  to  be  guided 
by  the  gross  profit  which  he  could  make  on  his  commodity,  and 
this  gross  profit  would  be  determined  by  the  cost  of  producing 


ADVANCE  IN  METHODS  OF  ANALYSIS        355 

the  article,  and  the  retail  price  which  competition  would  enable 
him  to  secure. 

"Many  food  products  can  easily  afford  to  spend  20  per  cent,  of 
their  receipts  for  advertising,  and  I  should  not  be  surprised  to 
find  that  some  spend  considerably  more." 

Now  if  it  were  possible  in  any  fine  of  business  to  base  adver- 
tising appropriations  strictly  upon  a  ratio  with  sales,  it  would 
seem  that  the  department  store  would  be  the  most 
Gross     promising  place  to  find  the  system  in  operation.     The 
Sales  Do  department  store  serves  a  limited  territory  which  can 
sent  All'  be  Studied  at  first  hand;  it  sells  direct  to  the  consuming 
the  Facts  public  without  the  intervention  of  agents  or  middle- 
men; it  handles  a  wide  variety  of  goods  of  different 
grades  and  prices;  the  seasonable  fluctuations  in  demand  can 
largely  be  offset  by  skilful  buying;  it  can  keep  in  constant  touch 
with  what  its  competitors  are  doing,  and  can  get  the  quickest 
possible  action  in  meeting  competition.     Yet  even  the  depart- 
ment store  does  not  find  a  fixed  percentage  of  the  gross  sales  a 
sure  guide  to  an  adequate  advertising  appropriation.     As  Mr. 
Hotchkin  points  out,  the  new  store  which  breaks  into  the  market, 
as  Gimbel  Brothers  did  in  New  York,  must  spend  more  money 
for  advertising.     When  the  "  shopping  centre  "  shifts  still  farther 
away  from  Wanamaker's,  the  latter  must  spend  more  money  m 
proportion  to  its  sales  in  order  to  persuade  people  to  travel  the 
extra  distance.     Thus  we  find  that  market  conditions  make 
themselves  felt  quite  as  surely  in  the  retail  field  as  they  do  m  the 
case  of  the  manufacturer.     Gross  sales,  taken  by  themselves,  do 
not  furnish  all  the  necessary  facts. 

It  is  a  fact,  however,  that  the  ratio  between  advertismg  expen- 
ditures and  gross  sales,  when  it  can  be  obtained  in  the  form  of 
an  average  for  an  entire  industry  or  the  major  part  of  an  indus- 
try, may  be  very  useful.  The  concern  which  is  able  to  approach 
the  subject  of  an  advertising  appropriation  with  the  knowledge 
that  the  normal  or  average  advertising  expenditure  in  its  field  is 
7  per  cent,  of  the  gross  sales  will  find  its  problem  materially 
simplified.  Its  analysis  of  the  market  with  respect  to  its  own 
product  will  indicate  wherein  that  normal  average  must  be  ex- 
ceeded, and  wherein  it  may  reasonably  be  expected  to  prove 
adequate.  The  normal  department-store  expenditure,  for  ex- 
ample, is  known  to  be  somewhere  between  3  and  4  per  cent,  of 
the  gross  sales.  Exceptional  circumstances  require  some  stores 
to  spend  more,  and  equally  exceptional  circumstances  enable 


•I 


ri 

i 

i 


356       ADVANCE  IN  METHODS  OF  ANALYSIS 

other  stores  to  prosper  with  less.  The  normal  expenditure  does 
not  by  any  means  fix  the  individual  appropriation,  but  it  furnishes 
a  starting-point.  It  supplies  a  tentative  ratio  which  is  to  be  raised 
or  lowered  according  to  the  analysis  of  the  individual  conditions. 
A  table  of  the  average  percentages  of  sales  devoted  to  ad- 
vertising in  certain  retail  lines  has  been  compiled  by  the  A.  W. 
Shaw  Company,  and  published  in  a  book  entitled  "Keeping  Up 
With  Rising  Costs,"  by  Wheeler  Sammons,  of  the  editorial 
staff  of  System.  The  figures  were  obtained  from  several  thou- 
sand retailers  in  all  parts  of  the  country,  and  when  averaged  give 
the  following  result: 

.                                                                                                   Per  Cent. 
Grocenes 83 

Hardware 1 .  12 

Vehicles  and  Implements 1 .  22 

Variety  Goods 1 .52 

Shoes [ .  1 .65 

Drygoods     1 .67 

Furniture 2.72 

Jewelry 2!85 

Clothing 3. 16 

Department  Stores 4 .01 

Mail-order  Houses 7.21 

Those  figures  may  be  regarded  as  typical  of  present-day  prac- 
tice, and  the  retailer,  by  comparison,  can  determine  whether 
his  own  expenditure  is  abnormal,  and  if  it  is,  whether  or  not  it 
is  justified  by  abnormal  conditions.  For  many  reasons  it  is 
doubtful  whether  a  similar  table  could  be  compiled  for  manu- 
facturers which  would  not  be  entirely  misleading.  But  any 
manufacturer  ought  to  be  able  to  arrive  at  a  pretty  close  esti- 
mate of  the  average  ratio  between  advertising  and  sales  in  his 
owTi  line  of  business,  and  such  an  estimate  will  give  him  a  good 
point  of  departure  when  he  sets  out  toward  the  determination 
of  his  own  ratio. 

But  the  greatest  objection  to  the  use  of  the  ratio  between  ad- 
vertising expenditure  and  sales  as  an  inflexible  standard  for 
Danger  in  ^^^ure  appropriations  lies  in  the  fact  that  it  bases  fu- 

Judging  ture  progress  upon  past  performance.  Last  year's 
the  Future  sales  are  water  which  has  gone  over  the  dam,  and  ad- 

ia  p2rf  y^^'tising  looks  toward  the  future.  The  point  is  aptly 
illustrated  by  G.  C.  Sherman,  president  of  Sherman 
&  Bryan,  New  York,  who  writes: 

"The  man  who  would  hazard  a  guess  as  to  what  percentage 


ADVANCE  IN  METHODS  OF  ANALYSIS        357 

of  past  gross  sales  a  manufacturer  should  appropriate  for  ad- 
vertising, to  produce  a  certain  percentage  of  future  sales,  could 
claim  close  kinship  with  the  individual  who  would  attempt  to 
tell  how  much  money  a  sick  man  ought  to  spend  to  get  well. 

"One  reason  why  so  many  businesses  are  ineflSciently  adver- 
tised to-day  is  because  manufacturers  and  advertising  men  too 
often  base  their  advertising  appropriations  upon  past  perform- 
ances instead  of  upon  faith  in  their  product  and  faith  in  the  fu- 
ture. Experience  teaches  me  that  advertising  appropriations 
which  yield  the  best  results  are  those  that  are  based  each  year 
upon  the  anticipated  sales  of  the  next  year — never  on  past  sales. 

"Past  performances  are  past.  They  teach  us  what  not  to  do 
rather  than  what  to  do.    They  serve  as  signals  but  not  as  the  rails. 

"When  I  am  asked  to  answer  the  question  as  to  what  per- 
centage of  gross  sales  a  manufacturer  should  appropriate  for 
advertising,  I  am  content  to  place  myself  on  record  as  answer- 
ing *  I  don't  know.'  " 

W.  C.  D'Arcy,  president  of  the  D'Arcy  Advertising  Company, 
St.  Louis,  elaborates  the  same  idea  still  further. 

"One  thing  that  makes  the  advertising  business  such  an  in- 
teresting field,"  he  says,  "is  the  fact  that  there  are  so  many 
people  engaged  in  it  who  take  the  matter  seriously,  and  are  con- 
stantly endeavoring  to  solve  all  sorts  of  problems  and  thereby 
increase  the  eflSciency  of  space  and  the  money  devoted  to  the 
promotion  of  good  goods. 

"However,  as  regards  the  matter  of  fixing  appropriations,  I  en- 
tertain the  opinion  that  it  will  never  be  possible  to  establish  a 
rule  of  thumb  that  will  enable  any  manufacturer,  or  any  adver- 
tiser, to  state  beforehand  and  with  definite  assurance  that  he's 
correct  in  his  premises  that  a  certain  percentage  of  his  sales  will 
represent  his  advertising  appropriation. 

"There  may  be  from  time  to  time  cases  where  my  contention 
would  be  subject  to  a  severe  jolt,  by  virtue  of  some  manufacturer 
having  solved  his  problem  after  that  fashion,  but  still  these  ex- 
ceptions can't  prove  the  rule. 

"It's  true  that  the  department-store  or  retail-store  adver- 
tiser can  very  largely  determine  his  expenditure  on  the  basis  of 
sales,  because  his  sphere  is  very  limited;  it's  directly  opposite 
to  the  kind  of  field  that  confronts  the  national  advertiser. 
But  even  in  the  case  of  the  retailer,  his  first  year's  advertising 
expenditure,  if  he's  a  big  man  and  thinking  of  big  business,  will 
in  all  probability  be  wholly  out  of  line  with  his  first  year's  sales, 


•I 


*i 


i 


i  } 


358       ADVANCE  IN  METHODS  OF  ANALYSIS 

at  least  so  far  as  a  nominal  per  cent,  which  has  been  devoted  to 
advertising  is  concerned. 

"We  have  a  concern  who,  for  the  present,  at  least,  is  basing 

its  advertising  appropriation  on  the  number  of  customers  it  has. 

Haw  Some  ^^^  ^^  allows  a  dollar  for  each  for  use  in  the  advertising 

Manufac-  department.    The  sales  aggregate  over  twelve  million. 

^"^T/  ^"i  ^^^sonally,  I  think  it  is  working  on  the  wrong  basis. 

son  if  utd      *'  YVg  jjj^^g  ^^^^j,  manufacturers  whose  sales  run  into 

big  figures,  and  who  have  in  the  past  been  allotting  10  per  cent,  of 

their  gross  sales  as  their  appropriations  for  publicity,  and  it 

seems  in  at  least  one  instance  to  be  working  satisfactorily. 

"We  have  other  manufacturers  who  don't  analyze  their  ap- 
propriation on  the  basis  of  their  total  sales,  but  who  apply  money 
for  advertising  on  the  basis  of  their  deductions  as  to  what  con- 
ditions are  generally,  and  which  may  interfere  with  or  make  for 
business  in  their  particular  field.  In  other  words,  they  apply 
the  charge  in  sufficient  quantity  to  accomplish  results  in  a  given 
season,  without  regard  to  what  the  pre\'ious  sales  have  been. 

"Personally,  I  am  convinced  that  every  advertiser  has  such  a 
different  problem  before  him  for  solution  that  no  cut-and-dried 
rule  can  be  followed,  either  as  to  the  media  he  uses,  the  size  of 
space  that  he  employs,  and  the  actual  story  he  tells,  or  the  amount 
of  money  that  he  appropriates  for  promotion. 

"Two  competing  manufacturers  can  succeed  and  market 
their  products  in  totally  different  ways.  Each  will  contend  that 
his  is  the  only  way  to  success.  So  it  really  in  our  minds  is  purely 
a  matter  of  an  advertiser,  through  the  aid  of  others,  or  by  him- 
self, finding  out  the  human  side  of  his  package,  or  his  product, 
and  building  a  dress  of  publicity  to  fit  its  peculiar  form.  It  may 
be  a  lean  figure,  or  it  may  be  a  fat  one.  It  may  be  old,  or  young. 
It  may  be  an  individual  who  performs  every  day,  once  a  week,  or 
once  a  month,  and  the  publicity  must  be  designed  to  suit  the 
needs  of  that  individual,  or,  if  you  please,  product. 

"The  ready-made  clothiers  have,  through  scientific  methods, 

figured  the  average  man's  measurements  and  adopted  sizes  for 

Wherein    *^^^^  garments  that  allow  them  to  sell  them,  pretty 

''Ready-   generally,  over  the  counter  of  the  retailer.     But  the 

made"     advertising  business  is  so  personal  with  a  product  that 

Camjmgns  measurements   must   in  each   instance  be  obtained. 

A  ready-made  campaign  might  fit  conditions  in  90  per 

cent,  of  the  cases,  but  the  10  per  cent,  guesswork,  or  loose-fitting 

ideas,  might  spell  ruin. 


ADVANCE  IN  METHODS  OF  ANALYSIS       339 

"Advertising,  to  succeed  to  its  fullest  possibilities,  must  be  de- 
signed to  hit  the  mark  each  time  the  trigger  is  pulled.  There- 
fore, percentages  as  the  basis  of  an  advertising  appropriation 
are  theoretically  good,  but  practically  unsound." 

It  may  be  interesting  to  manufacturers  of  different  lines  of 
goods  to  note  the  percentages  of  gross  sales  spent  by  a  represent- 
ative department  store  in  advertising  the  goods  of  each  depart- 
ment. If,  for  example,  it  costs  the  department  store  3  per 
cent,  of  its  gross  muslin  underwear  sales  to  advertise  that  depart- 
nient,  it  may  indicate  to  the  imderwear  manufacturer  that  he  is 
himself  sp>ending  too  small  a  percentage  for  his  own  advertising. 
The  following  figures  were  given  in  a  recent  issue  of  the  Dry 
Goods  Economist,  and  represent  the  expenditures  for  each  depart- 
ment of  a  well-known  Pacific  Coast  store  whose  entire  advertis- 
ing expenditure  for  the  period  covered,  amounted  to  2.5  per 
cent,  of  its  total  gross  sales.  Of  that  amount,  1.9  per  cent, 
was  used  in  direct  newspaper  advertising  for  specific  lines  of 
goods,  and  could,  therefore,  be  charged  to  the  proper  depart- 
ments. The  other  0.6  per  cent,  represents  the  general  adver- 
tising expense  (headings,  tail-pieces,  booklets,  novelties,  salaries, 
etc.)  which  could  not  be  charged  to  any  specific  fine  of  goods, 
and  was  distributed  as  a  general  overhead  charge  on  all  depart- 
ments. 

The  following  figures,  then,  represent  the  percentages  of  gross 
sales  of  each  department  which  were  actually  expended  directly 
to  sell  the  goods  of  the  department,  plus  a  general  overhead 
charge  of  0.6  per  cent : 

Per  Cent. 

Art  Goods 1.7 

Beds  and  Bedding 2.7 

Books 3,5 

Cameras 1 .  g 

Carplts,  Linoleum,  Mattings 2.9 

China,  Glassware,  Lighting  Fixtures 2.7 

Clothing  (Boys') 2.8 

Clothing  (Men's) 6.4 

Corsets 1.7 

Domestics  (Wash  Goods,  Flannels) 2.2 

Embroideries 2.8 

Gloves  (Women's  and  Children's) 1 . 5 

Groceries 17 

Hair  Goods 2.7 

Hair  Dressing  and  Manicuring  (including  switches  made  to  order) 9 

Hats  (Men's  and  Boys') 1.8 

Hosiery  and  Knit  Underwear  (Women's  and  Children's) ! .  1.8 


HI 


860       ADVANCE  IN  METHODS  OF  ANALYSIS 

Per  Cent. 

House  Dresses,  Wrappers,  etc 2.2 

Housefumishings  (inc.  Hardware) 2.1 

Infanta'  Wear 2.2 

Jewelry,  Clocks,  Silverware 1.8 

Laces 2.0 

Leather  Goods 2.2 

Linens 2.8 

Linings 1.2 

Men's  Furnishings 2.0 

Millinery 2.6 

Muslin  Underwear 8.0 

Neckwear,  Chiffons,  Veilings 2.0 

Notions 1.6 

Patterns 4.2 

Pictiu^s,  Frames,  etc 1.3 

Ribbons 1.4 

Sewing  Machines 5.3 

Shoes 2.6 

Silks  and  Velvets 2.1 

Sporting  Goods,  Trunks,  etc 8.6 

Stationery 2.2 

Suits  and  Coats  (Misses') 4.2 

Suits  and  Coats  (Women's) 5.2 

Toilet  Goods 1.7 

Toys,  Baby  Carriages 2.4 

Umbrellas  and  Women's  Handkerchiefs 3.2 

Upholsteries,  Lace  Ciulains 2.5 

Waists,  Petticoats,  Sweaters 3.0 

White  Goods 3.5 

Those  figures  are  useful  chiefly  as  showing  what  a  wide  varia- 
tion there  is  in  the  percentages  of  the  gross  sales  required  to  move 
diflferent  kinds  of  goods  in  the  same  market.  They  indicate  as 
well  as  anything  can  the  fallacy  of  attempting  to  draw  conclu- 
sions as  to  what  is  a  "fair"  percentage  of  the  gross  sales  to  spend 
for  advertising.  A  future  article  will  discuss  some  of  the  meth- 
ods whereby  an  appropriation  is  based  upon  an  analysis  of  the 
possible  market. 

Another  series  of  letters  and  other  discussions  of  the  question 
of  fixing  the  advertising  appropriation  app)eared  some  months 
later,  and  brings  out  the  opinions  of  various  other  advertisers, 
some  of  whom  incline  to  the  view  that  the  decrease  in  selling 
costs  ought  to  be  the  basis  for  estimating  appropriations,  rather 
than  the  relations  of  gross  sales  or  the  other  factors  commonly 
employed: 


.   ADVANCE  IN  METHODS  OF  ANALYSIS       361 

*Sometimes  the  amount  which  a  concern  can  invest  in  adver- 
tising is  strictly  limited  by  the  extent  of  the  bank  account,  and 

Another  ^^  ^^^^  ^^^^  ^^  ^^  necessary  to  make  the  best  of  it.  But 
Method  of  under  ordinary  conditions,  the  appropriation  ought  to 
Approach   be  big  enough  to  do  what  is  expected  of  it — which  state- 

tothc      ment  is  definite  only  in  that  it  indicates  the  necessity 

"  ^^^^  of  finding  out  what  is  expected.  It  directs  attention  to 
a  study  of  the  market  rather  than  to  the  past  performances  of 
the  concern  itself. 

"I  never  have  believed  in  the  percentage  method  of  fixing 
appropriations,"  says  John  O.  Powers,  president  of  the  John  O. 
Powers  Company,  New  York.  "It  costs  more  in  percentage  to 
build  a  business  up  than  it  does  to  keep  it  going.  It  costs  less 
in  percentage  to  keep  a  big  business  going  than  it  does  to  keep 
a  small  business  going. 

"Some  articles  are  different  from  others  and  situations  differ 
also.  It  seems  to  me  a  percentage  basis  is  a  lazy  way  of  doing 
it  or,  let  us  say,  an  easy  way  of  getting  the  advertiser  to  spend 
money,  when  what  ought  to  be  done  is  to  study  the  situation 
thoroughly  and  apply  the  necessary  selling  force  which  is  pref- 
erably composed  of  a  mixture  of  nine  tenths  brains  and  one 
tenth  money. 

"The  only  advantage  that  I  see  to  be  gained  out  of  the  per- 
centage method  is  that  it  accustoms  the  advertiser  to  the  idea 
of  considering  advertising  as  a  regularly  to  be  applied  force  to  his 
business." 

While  it  is  probably  true  that  the  method  of  figuring  the  ap- 
propriation as  a  fixed  p>ercentage  of  last  year's  gross  sales  is  fol- 
lowed by  the  great  majority  of  concerns  which  have  become 
established,  more  and  more  advertising  men  are  taking  the  view 
set  forth  by  Mr.  Powers.  They  regard  the  jjercentage  basis  as  a 
good  test  of  the  efficiency  of  the  advertising  which  has  been  done, 
but  when  it  comes  to  next  year's  appropriation  the  only  fair 
comparison  is  a  comparison  with  next  yearns  sales — ^which  are, 
of  course,  unknown. 

At  the  November,  1912,  meeting  of  the  Technical  Publicity 
Association  of  New  York,  21  prominent  advertisers  of  technical 
products  made  reports  showing  the  methods  by  which  their 
appropriations  were  arrived  at.  Eight  of  those  advertisers 
declared  that  the  business  they  expected  to  get  or  the  business 

*Pnnters*  Ink,  May  6,  1915,  p.  8. 


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362       ADVANCE  IN  METHODS  OF  ANALYSIS 

they  ought  to  get,  was  not  considered,  but  that  their  appro- 
priations were  figured  largely  upon  past  performances.  The 
other  13,  however,  took  a  different  view.  Past  performances 
were  important,  certainly,  but  market  conditions  were  even 
more  important.  They  still  figured  their  appropriations  upon  a 
percentage  of  sales,  but  future  sales  were  an  important  factor  in 
the  equation. 

F.  R.  Davis,  of  the  General  Electric  Company,  Schenectady, 
N.  Y.,  said  that  his  company  set  apart  an  annual  sum  for  gen- 

BreaJnng  eral  periodical  advertising,  covering  all  of  its  varied 
^tcay /rom  products,  which  sum  was  to  be  used  "if  needed." 

Traditum  The  appropriations  for  other  forms  of  advertising 
were  arrived  at  separately  for  each  product.  The  market  for 
each  type  of  machinery  was  analyzed,  the  probable  sales  esti- 
mated, and  an  amount  designated  which  should  be  ample  for 
the  work  required.  Those  amounts,  however,  did  not  represent 
absolute  limits,  as  an  emergency  in  any  part  of  the  business 
might  demand  money  quickly. 

Those  instances  indicate  a  breaking  away  from  the  traditional 
method  of  basing  advertising  expenditures  upon  a  fixed  per- 
centage of  last  year's  gross  sales.  In  some  cases  that  tendency 
has  progressed  to  the  point  where  the  appropriation  is  not  di- 
rectly based  upon  sales  at  all.  The  present  writer  has  been  per- 
mitted to  read  the  report  to  the  Board  of  Directors  of  an  ad- 
vertising manager  for  an  established  concern  doing  a  national 
business  in  goods  appealing  to  women.  A  substantial  increase 
in  the  appropriation  was  requested,  and  granted,  but  the  ques- 
tion of  sales  percentages  was  nowhere  touched  upon.  By  means 
of  his  map-and-tack  system  the  advertising  manager  had  com- 
piled a  list  of  towns  within  certain  limits  of  population,  where  the 
sales  fell  below  a  certain  minimum.  The  list  was  a  formidable 
one,  and  contained  all  the  facts,  including  dealers'  names  and  the 
amounts  of  their  purchases  during  the  past  year.  It  was  an 
effective  showing  of  the  weak  spots  in  the  company's  distribu- 
tion, and  the  advertising  manager  asked  for  a  certain  amount 
per  dealer,  to  be  divided  up  in  accordance  with  a  submitted 
plan  including  catalogues,  window-display  material,  electros, 
etc. 

As  a  matter  of  fact,  the  new  appropriation  represented  a  large 
increase  when  based  upon  a  percentage  of  the  past  year's  sales,  as 
we  privately  figured  it  for  our  own  information.  But  that  ques- 
tion did  not  come  up  in  the  directors'  meeting.     They  wisely 


ADVANCE  IN  METHODS  OF  ANALYSIS       363 

considered  that  they  were  making  an  investment  for  a  particular 
purpose — to  strengthen  sales  where  it  was  most  needed. 

Probably,  as  Mr.  Powers  suggests,  the  system  of  basing  the 
appropriation  upon  a  percentage  of  the  sales  has  been  so  widely 
adopted  because  it  is  the  easiest  way  to  dispose  of  a  vexatious 
question.  The  new  concern,  which  has  no  past  record  of  sales 
to  fall  back  upon,  will  start  out  with  an  appropriation  based  upon 
the  number  of  possible  buyers  in  the  territory  to  be  reached,  let 
us  say.  At  the  end  of  the  first  year  it  has  made  some  progress, 
and  extends  its  territory,  still  keeping  its  appropriation  within 
the  limits  of  so  much  per  buyer.  Mter  a  few  years  its  manage- 
ment considers  that  the  concern  has  "turned  the  comer," 
and  immediately  the  appropriation  is  figured  upon  a  different 
base. 

For  example:  in  Printers'  Ink  for  March  23,  1911,  the  figures 
were  given  for  the  first  three  years'  campaign  of  the  Howard 
Dustless  Duster  Company,  Boston,  as  follows: 

Advertising 
Appropriation         Sales 

1908 $  2,161.70    $  1,041.04 

1909 11,314.16      66,235.65 

1910 14,521.23    112,740.01 

Assuming  that  the  appropriations  were  based  upon  some  defi- 
nite market  conditions,  and  that  they  were  not  simply  arbi- 
trarily decided  upon,  there  would  seem  to  be  every  reason  for 
continuing  the  system.  Instead  of  that,  we  find  that  the  com- 
pany, in  1911,  began  to  base  its  appropriation  upon  the  ratio 
between  advertising  and  sales  which  obtained  in  1910.  Evi- 
dently the  earlier  system,  which  had  worked  well,  as  the  figures 
show,  was  abandoned,  on  the  theory  that  the  rate  of  increase 
shown  in  1910  was  a  normal  rate.  Perhaps  it  was.  There  is  no 
intention  to  criticise  the  company  here — the  case  is  cited  simply 
as  an  illustration  of  the  tendency  to  get  on  the  percentage  basis 
as  soon  as  the  profits  begin  to  show. 

Of  course  the  concern  which  is  just  commencing  its  business 
career  cannot  base  its  appropriation  upon  last  year's  sales. 

Figuring  Some  other  basis  must  be  found,  and  very  frequently 

the  ''Adver-  it  is  discovered  in  the  number  of  possible  buyers  in  the 

tising  ^   field  which  is  intended  to  be  covered  during  the  fiirst 

Margin'  yg^r.  The  margin  between  the  manufacturing  cost 
and  the  selling  price  of  the  goods  must  include  selling  cost  and 


I 


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364       ADVANCE  IN  METHODS  OF  ANALYSIS 

profit.    A  certain  proportion  of  the  total  selling  cost  must  be 
devoted  to  advertising. 

Suppose  we  have  a  breakfast  food,  in  the  class  which  can  be 
sold  at  retail  for  15  cents  per  package.  It  costs  two  dollars  to 
produce  a  case  of  36  packages,  which  are  to  be  sold  to  the  con- 
sumer for  $5.40.  The  jobber  pays  $4.15  per  case,  and  sells  to 
the  dealer  at  $4.50.  Thus,  out  of  our  gross  margin  of  $3.40,  the 
jobber  absorbs  35  cents,  and  the  dealer  gets  90  cents,  leaving 
$2.15  for  our  own  selling  cost  and  profit.  We  set  aside  a  ten- 
tative 10  per  cent,  for  our  profit,  which  amounts  to  41 J  cents 
on  the  jobber's  price  of  $4.15,  and  we  find  there  is  left  for  selling 
cost,  including  the  advertising,  the  magnificent  sum  of  $1.73 J. 

Now  the  experienced  breakfast-food  men  in  the  company  tell 
us  that  it  is  not  safe  to  allow  less  than  a  dollar  per  case  for  the 
direct  selling  expense,  exclusive  of  the  advertising;  so  that  we 
have  left  73$  cents  which  may  be  spent  for  advertising  to  sell  a 
ease  of  36  packages  to  the  consumer.  In  other  words,  we  have 
arrived  at  the  conclusion  that  we  can  afford  to  spend  for  advertis- 
ing during  the  first  year,  2.04  cents  per  package  or,  to  put  it  a  bit 
differently,  we  can  spend  2.04  cents  per  family  in  the  territory 
we  are  to  reach.  Assuming  that  there  are  an  even  miUion  fami- 
lies in  our  market,  our  first  year's  appropriation  will  amount  to 
$20,400. 

It  will  be  noticed  at  once  that  this  hypothetical  concern  is  be- 
ginning in  a  small  way,  covering  perhaps  a  single  state  the  first 
year.  At  the  end  of  that  year  it  finds  that  it  has  sold  15,000 
cases  of  the  goods.  Its  gross  sales  amount  to  $62,250,  and  its 
expenses  have  been  $62,400;  a  net  loss.  But  when  it  comes  to 
analyze  its  selling  cost,  instead  of  finding  that  the  sales  force 
has  absorbed  a  dollar  a  case  as  was  anticipated,  it  finds  that  this 
Item  has  been  reduced  to  80  cents.  It  is  only  fair,  and  quite 
reasonable  as  well,  to  credit  that  saving  to  the  consumer  ad- 
vertising which  has  made  it  that  much  easier  to  stock  the  jobber 
and  dealer.  So,  for  the  following  year  we  have  a  margin  for 
advertising  of  93j  cents  per  case  instead  of  73|  cents.  We 
call  spend  2.59  cents  per  family  instead  of  2.04  cents.  Our 
original  territory  would  command  an  appropriation  of  $25,000 
for  next  year. 

But  we  have  already  reached  upward  of  half  of  our  million 
families  in  that  territory,  and  they  present  a  nucleus  of  good  will. 
Many  of  our  jobbers  sell  to  dealers  outside  of  the  restricted 
territoiy.    We  have  earned  no  profits  yet,  but  our  seUing  cost  is 


^ll 


ADVANCE  IN  METHODS  OF  ANALYSIS       365 

coming  down,  and  we  can  see  daylight  ahead.  So  we  take  on  an 
adjoining  district  containing  a  million  families  more,  and  our  ap- 
propriation for  advertising  becomes  $51,800  for  the  second  year. 

Next  year  we  sell  35,000  cases.  Our  gross  sales  are  $145,250. 
Expenses  are  $148,050.  Still  the  balance  sheet  shows  a  net  loss, 
but  the  selling  cost  is  down  to  75  cents.  We  have  a  margin  per 
case  of  98§  cents  now.  We  can  spend  2.75  cents  per  family. 
We  spread  out  still  farther,  and  on  a  basis  of  3,000,000  families 
our  third  year's  appropriation  is  $81,900. 

The  third  year  shows  a  profit  on  sales  of  nearly  100,000  cases, 
and  the  selling  cost  comes  down  to  a  fraction  above  71  cents. 
Our  advertising  margin  is  now  better  than  a  dollar  per  case,  and 
is  approaching  three  cents  per  family.  There  is  no  need  for 
further  illustration,  for  the  system  should  be  perfectly  clear. 
The  appropriation  is  based  upon  a  certain  expenditure  per  possi- 
ble customer,  and  that  expenditure  is  determined  by  the  actual 
reduction  in  the  selling  cost  through  the  sales  force. 

The  method  outlined  above  represents  an  actual  system  which 
is  in  use  by  a  manufacturer — not  of  a  breakfast  food,  however. 
Of  course  the  question  at  once  arises  as  to  what  is  to  be  done 
when  the  selling  cost  reaches  the  point  below  which  it  cannot  be 
reduced,  or  what  would  happen  if  the  selling  cost  were  to  in- 
crease suddenly,  due  to  business  conditions,  for  example.  The 
only  answer  is  that  the  manufacturer  would  use  his  judgment. 
No  system  of  figuring  appropriations  will  take  the  place  of  com- 
mon horse  sense.  As  an  aid  to  good  judgment,  any  system 
may  be  valuable,  but  no  man  has  ever  yet  succeeded  in  fiiiding 
a  substitute  for  it. 

Thus  far  we  have  made  no  mention  whatever  of  any  forms  of 
analysis  except  those  relating  to  commercial  statistics  and  others 
of  a  kindred  character. 

The  use  of  analytical  methods  in  the  psychology  of  advertis- 
ing is  an  enormous  field  of  itself.  Prof.  H.  L.  Holling- 
worth  of  Columbia  University  is  among  those  who  have  done 
valuable  work  in  this  field,  and  the  following  summary  which 
he  makes  of  the  results  of  his  analysis  of  ninety-nine  successful 
advertisements  is  illustrative  of  the  way  in  which  psycholo- 
gists are  learning  to  apply  laboratory  methods  to  a  study  of  the 
actual  problems  of  business  men: 


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S66       ADVANCE  IN  METHODS  OF  ANALYSIS 

*Here  are  ninety-nine  advertisements  which  have  been  sub- 
mitted to  me  for  psychological  analysis.  Each  of  these  adver- 
tisements is  known  or  believed  to  have  been  unusually  success- 
ful. By  success  in  this  case  is  not  meant  conformity  to  any 
esthetic,  typographic,  literary,  or  psychological  principles.  At 
least  this  is  not  the  primary  meaning  of  the  word.  These  ad- 
vertisements were  successful  in  that  they  actually  sold  goods, 
produced  inquiries,  provoked  replies,  or  attained  publicity.  If 
they  are  psychological  in  structure,  content,  or  principle,  at 
least  we  know  that  they  were  not  selected  beforehand  on  this 
basis.  It  has  been  interesting  to  work  over  this  very  hetero- 
geneous mass  of  advertising  material  in  the  attempt  to  classify 
each  specimen  under  the  various  categories  and  principles  which 
the  psychologist  uses  when  he  studies  or  talks  about  advertise- 
ments. 

A  complete  analysis  would  have  been  an  indefinitely  pro- 
longed task.     I  have  chosen  to  take  seven  rather  different  psy- 
Seven      chological  aspects,  to  classify  all  the  advertisements 
Psycho-    on  these  bases,  and  in  this  way  to  inquire  what  are 
loffical     the  leading  psychological  characteristics  possessed  by 
Clasdfica-  these  advertisements  as  a  group.     The  seven  aspects 
^      chosen  are  suggestive  of  only  a  few  of  the  many  points 
of  view  from  which  the  nature  of  an  advertisement  may  be  re- 
garded. 

A  familiar  classification  is  one  which  has  been  made  in  terms 
of  the  general  type  of  the  appeal,  the  task  which  the  advertise- 
ment sets  itself.  It  may  proceed  by  presenting  a  deliberate  set 
of  arguments,  in  a  logical  way  appealing  to  the  intelligence  of  the 
reader.  Then  we  call  it  "long-circuit'*  copy  if  we  are  psycholo- 
gists, and  "reason- why"  copy  if  we  are  advertising  men.  Or 
it  may  quite  ignore  the  reader's  intelligence  and  appeal  rather 
to  his  instincts,  his  feelings,  his  emotions,  and  prejudices.  Then, 
if  we  are  psychologists,  we  call  it  "short-circuit'*  copy.  To  the 
advertising  man  this  is  human-nature  copy.  There  is  a  third 
type  which  is  merely  indeterminate  or  mixed,  and  often  con- 
sists of  mere  assertions  and  dogmatic  statements.  Classified  on 
this  basis  the  results  are  as  follows : 

Long-circuit,  or  reason-why  copy 68 

Short-circuit,  or  human-nature  copy 17 

Mixed  or  indeterminate 19 

^Advertising  and  Selling,  August,  1915,  p.  19. 


^ADVANCE  IN  METHODS  OF  ANALYSIS        367 

Obviously  these  successful  advertisements  have  made  their 
major  appeal  to  the  inteUigence,  the  calm,  deliberate  reflection, 
of  the  readers.  They  have  on  the  whole  not  been  satisfied  with 
bare  and  unsupported  assertion,  nor  have  they  made  merely  a 
sentimental  and  emotional  appeal.  How  far  this  tendency  has 
been  determined  by  the  character  of  the  products  advertised 
it  is  difficult  to  say.  There  are  certain  types  of  commodities 
for  which  the  short-cu-cuit  appeal  is  especially  appropriate. 
But  taking  these  products  as  a  total  group,  the  greater  propor- 
tion of  them  have  not  used  this  type  of  appeal. 
^  Thirty  of  these  ninety-nine  advertisements  constitute  an 
interesting  group  by  themselves.  They  are  what  I  may  call,  for 
Rational'  ^^^^  ^^  ^  better  term,  "rationalization"  copy.  One 
J^*"  of  the  striking  tendencies  of  human  beings  is  to  act. 
Copy  judge,  believe,  or  vote  on  strictly  instinctive,  emotional 
grounds,  and  then,  after  the  act  is  committed,  to  try  to 
justify  or  defend  it  by  intellectual  and  logical  reasons.  First  of 
all  we  believe  in  immortality,  just  because  we  feel  like  it,  want  it, 
or  have  an  instinctive  yearning  for  it.  Then  having  formulated 
our  belief,  on  these  purely  non-rational  grounds,  we  search  and 
search  for  arguments  which  we  can  give  to  our  neighbors  in 
justification  of  our  belief.  We  would  like  them  to  think  that  we 
ourselves  believe  on  the  grounds  of  the  logical  arguments.  But 
in  our  heart  of  hearts  we  know  that  we  first  believed,  and  only 
when  our  belief  was  challenged  did  we  search  for  logical  proofs  or 
reasons.  Men  buy  automobiles  in  the  same  way.  I  buy  my 
car  because  my  neighbor  has  one,  because  it  is  the  fashion  to  have 
one,  because  of  my  pride,  my  jealousy,  my  vanity.  Then,  hav- 
ing bought  the  car,  I  look  about  for  logical  justifications  which  I 
can  give  for  my  conduct.  "It  saves  time,"  "It  entertains  the 
family,"  "It  gives  us  needed  relaxation,"  "It  saves  car  fare," 

Now  the  advertising  man  is  beginning  to  understand  this 

human  tendency  and  at  least  thirty  of  these  ninety-nine  adver- 

The  Emo-  tisements  begin  with  a  distinctly  emotional,  short- 

tional,     circuit  appeal,  thus  persuading  and  seducing  the  reader. 

Short'     Then  the  ad- writer  hastens  to  "add  a  series  of  logical 

A^  reasons,  which  probably  exert  but  little  influence  on 
f^  the  prospect's  own  decision,  but  they  fortify  him 
against  the  objections  of  his  mother-in-Jaw>  his  employer,  his 
banker,  and  his  conscience!  This  \s  a  distinct  type  of  adver- 
tisement which  is  coming  more  and  more  into  prominence,  and 


868       ADVANCE  IN  METHODS  OF  ANALYSIS 

it  takes  advantage,  in  a  very  clever  way,  of  the  "rationalizing" 
tendency  of  aU  of  us. 

What  devices  do  these  advertisements  rely  on  in  catching  the 
reader's  attention  as  he  skims  through  the  medium?  Here  we 
may  classify  them  according  to  whether  they  rely  mainly  on 
mechanical  devices,  such  as  size,  contrast,  position,  intensity, 
repetition,  etc.;  or  whether  they  rely  mainly  on  interest  incen- 
tives, such  as  color,  illustration,  the  comic,  the  novel,  ornament, 
suggested  activity,  etc.  Classified  on  this  basis  the  results  are 
as  follows: 

Relying  mainly  on  mechanical  devices 84 

Relying  mainly  on  interest  incentives 44 

Mixed  or  indeterminate 21 

As  the  psychologist  would  expect,  the  interest  incentives  are 

the  more  prominent.    The  fact  that  they  are  not  more  promi- 

Irderest    ^^ent  than  they  are  is  quite  certainly  one  of  the  reasons 

Incentives  why  these  advertisements  were  not  still  more  suc- 
Most     cessful  than  they  are  said  to  have  been. 

Promtneni  Having  caught  the  reader's  attention,  what  effort 
is  made  to  hold  his  interest?  One  of  the  effective  factors  in  this 
second  task  is  what  we  call  the  "feeling-tone"  of  the  advertise- 
ment. Does  it  produce  a  general  reaction  of  agreeableness, 
pleasantness,  and  satisfaction,  or,  on  the  contrary,  a  general  at- 
mosphere of  strain,  unpleasantness,  and  discomfort?  Many 
factors  will  contribute  to  this  effect — the  esthetic  arrangement, 
the  legibility,  the  ornament,  literary  quality,  the  illustrations, 
the  images  and  associations  provoked,  etc.  I  have  endea- 
vored to  classify  all  the  specimens  on  this  basis.  This  classifica- 
tion will  be  somewhat  less  rehable  than  most  of  the  others,  since 
what  pleases  me  may  affect  others  somewhat  differently.  But 
as  they  affect  me,  they  are  classified  as  follows: 

Distinctly  agreeable  feeling  tone 51 

Distinctly  disagreeable  feeling  tone 11 

Indifferent  feelmg  tone 37 

It  is  clear  at  once  that  those  who  had  in  hand  the  prep- 
aration of  these  advertisements  took  pains  to  avoid  distinctly 
disagreeable  content,  form,  arrangement,  typography,  and 
association,  or  else  they  did  it  just  as  matter  of  course.  About 
one  third  of  them  succeeded  only  to  an  indifferent  degree, 


ADVANCE  IN  METHODS  OF  ANALYSIS       369 

while  over  half  of  them  succeeded  in  producing  a  distinctly 
agreeable  effect.  However  successful  these  advertisements 
may  have  been,  it  is  clear  that  they  might  have  been  made 
more  efficient  at  the  hands  of  more  discerning  illustrators, 
printers,  and  copy-writers.  At  least  there  is  no  evidence 
here  that  pleasing  copy  militates  against  the  primary  purp)ose, 
which  is  to  sell  goods. 

Another  important  task  of  any  advertisement  is  that  of  fixing 
itself  in  the  reader's  mind,  so  that  he  may  carry  away  its  mes- 
sage, or,  in  general  terms,  that  he  may  remember  it.  Two  classi- 
fications were  made  on  this  basis.  One  question  was,  "Is  the 
copy  well  unified?"  Unity  is  one  of  the  prime  requisites  of  an 
advertisement  that  is  to  make  a  permanent  impression  on  the 
reader's  mind.  Unity  may  be  achieved  by  artificial,  struc- 
tural, or  logical  means.  Classified  on  the  basis  of  their  unity,  I 
arrange  the  advertisements  roughly  as  follows: 

Well  or  fairly  well  unified 5S 

Indifferently  unified S5 

Wretchedly  unified H 

Once  more  it  is  apparent  that  these  advertisements  conform, 
on  the  whole,  to  the  psychological  criterion.  There  are  but  a 
few  of  them  that  are  distinctly  of  the  unco-ordinated,  piecemeal 
variety  which  used  to  be  so  common,  and  over  half  of  them  stand 
out  in  the  field  of  view  and  also  in  the  memory  as  co-ordinated, 
unified  wholes. 

Another  factor  which  is  important  in  determining  the  memory 
value  of  an  advertisement  is  what  I  have  elsewhere  called  its  con- 
formity to  the  "forward  law"  of  thinking.  The  natural  se- 
quence of  ideas  in  any  moment  of  need  is — ^first,  the  general  need 
or  the  general  type  of  article  required;  second,  some  specific 
brand,  name,  trademark,  firm,  etc.  The  advertisement  should 
train  the  reader  in  this  sequence  by  presenting  first  the  general 
situation  or  need  of  quality,  and  then  following  this  up  by  nam- 
ing the  brand,  the  firm,  the  specific  name,  etc.  It  was  formerly 
the  custom  for  advertisers  to  begin  with  a  bold  and  magnified 
headline  which  gave  the  firm  name  or  the  special  brand.  Then 
this  was  followed  by  the  description  of  the  need  which  the  brand 
or  the  firm  could  supply.  This  is  an  absolutely  unpsychological 
and  ineffective  method,  and  fails  to  conform  to  the  "forward 
law"  of  our  ordinary  thinking.  It  is  gratifying  to  note  that  a 
real  change  is  being  made  in  this  matter.     Classified  on  the  basis 


370       ADVANCE  IN  METHODS  OF  ANALYSIS 

of  whether  or  not  the  arrangement  and  sequence  of  ideas  con- 
forms to  this  law,  the  results  are  as  follows: 

Number  conforming  to  the  "forward  law" 62 

Number  not  conforming  to  the  "forward  law" 37 

Finally,  I  have  classified  all  the  advertisements  on  the  basis 
of  the  selling-point  most  prominently  made,  the  interest,  in- 
stinct, need,  or  value  which  is  most  emphasized.  Where  more 
than  one  selling-point  is  advanced,  as  is  often  the  case,  I  have 
chosen  the  most  prominent  one.     The  results  are  as  follows : 

Selling-point,  or  interest,  to  which  the  Number  of 

appeal  is  directed  Cases 

Mere  assertion  of  value IS 

Time  saved,  eflBciency  increased 11 

Scientific  construction 10 

Durability  and  lasting  quality 10 

Economy,  bargain,  and  profits 8 

Reputation  of  the  firm 7 

Modernity  and  fashion 6 

Personal  comfort  and  ease 5 

Health  and  cleanliness,  sanitariness 5 

Imitation  of  others 5 

Appetizing,  and  appeal  to  the  senses 4 

Specific  recommendations  of  others d 

Ambition  and  pride S 

Sporting  instincts,  play 2 

Guarantee 2 

Family  affection 1 

Medicinal  value 1 

HospitaUty  and  courtesy 1 

Civic  loyalty,  patriotism 1 

Used  by  social  superiors 1 

Beautifying  qualities 0 

Imported 0 

Warning  against  substitutes 0 

Sympathy  for  others 0 

Several  points  are  to  be  made  out  from  this  table.  It  is  to  be 
seen  at  once  that  some  of  these  successful  advertisements  still 
tend  to  take  the  old-fashioned  blatant  and  unsupported  tone, 
merely  asserting  the  value  of  their  wares  without  even  sug- 
gesting the  reason  for  this  assumed  superiority.  But  it  is  con- 
soling to  find  that  only  thirteen  out  of  the  total  of  ninety-nine 
make  this  their  most  striking  note.  The  appeals  that  are  repre- 
sented by  at  least  ten  of  the  advertisements  (aside  from  the 


ADVANCE  IN  METHODS  OF  ANALYSIS       371 

bare  assertions  of  value)  are  those  of  time  saved  and  eflBciency 
increased,  scientific  construction,  and  durability  or  lasting 
quality.  Standing  midway  in  the  scale,  represented  by  at  least 
five  of  these  successful  advertisements,  are  the  appeals  to  econ- 
omy, reputation,  personal  comfort,  health,  and  cleanhness,  and 
the  imitation  of  what  others  are  doing.  All  the  other  appeals  in 
the  table  are  represented  by  very,  very  few  of  these  advertise- 
ments chosen  on  the  basis  of  their  actual  success,  and  four  of 
them  are  not  represented  by  a  single  specimen. 

On  the  whole,  if  one  ignores  the  class  of  mere  assertions  and 
considers  actual  selling-points,  by  far  the  larger  number  of  these 
successful  advertisements,  at  least  half  of  them,  present  strictly 
relevant  descriptive  statements  of  actual  values,  and  the  re- 
mainder make  their  appeal  to  strictly  personal  interests  and  in- 
stincts. The  vague,  generalizing  appeal,  the  appeal  on  social 
lines,  the  appeals  to  civic  and  imported  interests,  medicinal  de- 
sires, the  warning  against  substitutes,  come  in  for  very  little 
representation,  fi  the  reader  will  consult  the  "Table  of  Per- 
suasiveness," presented  in  my  books  on  phychology  and  adver- 
tising, he  wi&  observe  that  this  Table  of  Persuasiveness, 
formulated  on  the  basis  of  laboratory  experiments  solely, 
predicts  with  striking  accuracy  the  order  of  these  selling-points 
as  here  made  out. 

In  spite  of  the  roughness  of  the  analysis  which  the  hetero- 
geneity of  this  material  entails,  numerous  interesting  and  prac- 
tically valuable  points  seem  to  me  to  have  emerged.  Of  special 
interest  to  me  as  an  applied  psychologist  is  the  correspondence, 
on  the  whole,  between  the  formulated  principles  of  the  "psy- 
chology of  advertising  **  (and  here  I  bow  before  the  scorn  of  the 
"practical  man")  and  the  actual  results  of  the  analysis  of  this 
set  of  successful  advertisements. 


L 


fl 


<>l 


CHAPTER  X 

DEVELOPBiENTS  IN  ADVERTISING  MEDIUMS 

IT  IS  difficult  to  pick  out  from  the  year's  history  of  the  prin- 
cipal advertising  mediums  any  single  event  or  group  of 
events  indicating  advance  or  change,  and  yet  advance  and 
development  are  constant  and  unmistakable. 

In  the  appendix  to  this  compilation  wiD  be  found  the  "stand- 
ards of  practice,"  which  have  been  developed  in  the  case  of 
some  of  the  mediums  as  a  result  of  the  eflFort  to  codify  the  ethi- 
cal principles  underlying  the  progress  of  these  mediums  in  re- 
cent years. 

In  addition  to  these  there  are  a  few  articles  and  statements 
which  have  appeared  during  the  year,  which  indicate  some  of 
the  lines  in  which  progress  is  being  made.  None  of  these  can 
be  taken  as  reflecting  the  actual  growth  in  the  field,  but 
each  of  them  indicates  the  sort  of  activity  in  which  those  en- 
gaged in  developing  these  mediums  are  most  vitally  inter- 
ested. 

There  would  be  no  particular  profit  in  going  into  the  advan- 
tages of  different  mediums  at  this  point.  But  there  might  be 
some  advantage  in  repeating  a  series  of  terse  statements  of  the 
purposes  and  aims  of  some  of  the  principal  mediums  made  at  a 
meeting  of  the  League  of  Advertising  Women  held  in  New  York 
City  on  October  20,  1914.  At  that  time  the  representatives  of 
various  mediums  were  given  ten  minutes  each  in  which  to  pre- 
sent arguments  in  favor  of  their  various  methods  of  advertising. 
The  foUowing  excerpts  from  some  of  the  speeches  summarize 
the  presentations  made: 

971 


ADVERTISING  MEDIUMS 


873 


*"The  fanner  is  the  only  class  enjoying  continued  prosperity — 

there  are  two  million  farmers  to-day  with  incomes  over  $2,500 

AgrieuUuralP^^  year;  and  75  per  cent,  of  the  thirty-five  million 

Press:     people  residing  on  farms  are  subscribers  to  agricul- 

Wallace    tural  papers.    The  agricultural  papers  have  an  ideal, 

Richardson  ^^^^  ^^  j^j^g  ^^  ^y^^y  j^g^^^  j^^j^  published  their  main 

purpose  has  been  to  give  the  readers  real  service.  The  farm 
papers  were  the  first  to  guarantee  subscribers  against  loss  from 
accepting  advertised  offers. 

"Not  only  the  farm  population,  but  the  country  dealer  who 
serves  the  farmer,  is  reached  through  the  agricultural  papers, 
and  that  valuable  small-town  trade  has  been  considerably  neg- 
lected by  the  advertiser.  There  are  495  agricultural  papers, 
and  the  use  of  fifty,  well  selected,  will  enable  an  advertiser  to 
reach  every  p)ossible  sales  prospect  in  the  rural  districts  with 
whom  he  would  care  to  do  business.  The  farm  papers  offer  the 
advertiser  a  chance  to  build  a  second  line  of  defence  against  the 
day  when  competition,  substitution,  and  the  increased  cost  of  ad- 
vertising for  city  trade  will  make  it  imperative  that  the  sales  man- 
ager have  other  fields  to  fall  back  on  to  help  produce  dividends. 

"There  are  six  million  farm  families  worth  over  $6,000  each; 
and  two  million  of  these  are  worth  over  $15,000  each." 

"The  value  of  magazine  advertising  is  simply  illustrated  by 

the  experience  of  the  largest  manufacturer  of  powders,  per- 

^  fumes,  soaps,  etc.     Seventeen  years  ago  his  entire 

zines-^D.  advertising  appropriation  went  into  the  magazines 

E.  Evans,  — $25,000.     To-day  he  is  spending  $250,000  yearly  on 

Curtis     magazines  alone.  Last  year  $33,000,000  was  spent  on 

Publishing  magazine  advertising.    The  magazines  automatically 

^  ^  eliminate  for  the  advertiser  the  unprofitable  pubHc  iUit- 

erates,  foreign-born,  and  negroes,  because  these  are  not  included 

in  the  magazine-reading  class,  and  there  are  to-day  between  six 

and  seven  million  magazine-reading  homes. 

"Other  mediums  should  be  used  to  supplement  magazine 
advertising,  but  you  must  use  magazine  advertising  to  keep 
your  market  sold.  It  is  the  magazine  that  keeps  on  ever- 
lastingly telling  yoiu"  story  to  the  public,  and  no  matter 
what  medium  you  begin  using,  it  is  the  magazine  that  will 
permanently  remind  your  pubUc  and  support  your  distribution." 


*Advertinng  and  Selling,  November,  1914,  p.  32. 


i'f' 


fir 


S74 


ADVERTISING  MEDIUMS 


"The  newspaper  is  the  one  medium  in  which  you  can  change 
your  copy  and  your  style  of  appeal  every  single  day.    The  news- 

News-  P^P^r  carries  with  it,  through  its  editorial  matter, 
papers:  A.  the  *Do  it  now'  atmosphere.  It  forever  suggests 
J.  Haskell  rapid  action  to  the  readers,  and  that  thought  extends 
"IseraM''  ^^  ^^  advertising  columns  and  to  your  advertise- 
ment. It  may  take  five  years  of  intermittent  appeal 
from  other  media  to  get  action  from  a  reader,  but  five  separate 
appeals — every  single  day  continuously — ^are  dynamite  to  your 
newspaper  reader." 

"A  good  advertiser  once  recommended  that  you: 

Outdoor  "(^^  ^^^  y^"^  advertisement  where  it  can  be  seen. 
Display       "(2)  Write  it  so  people  will  read  it. 

H.J.         "(3)  Tell  the  truth  so  people  will  believe  it.    That 

Makin,  0.  is  what  outdoor  advertising  does.    You  don't  have 

(£        to  buy  anything  to  read  an  outdoor  sign.     YouVe 

got  to  read  it  whether  you  will  or  no,  because  it*s 

written  so  conspicuously  that  it  can't  be  passed  by.     The  best 

advertising  is  condensed  information,  and  outdoor  advertising 

always  is  brief.     You  can  place  your  outdoor  ad  in  the  kind  of 

atmosphere  to  hit  your  prospect  at  the  psychological  moment. 

You  can  place  your  biscuit  ad  near  the  neighborhood  grocery 

where  the  housemaid  sees  it  on  her  way  to  market  for  the  day. 

You  can  reproduce  illustrations  of  your  product  or  your  package 

in  the  exact  size,  the  exact  shape,  the  exact  color,  and  without 

restriction  as  to  the  artistic  effect  you  can  achieve. 

"And  finally,  outdoor  advertising  is  the  place  to  reach  the 
bulk  of  the  buying  population — the  85  per  cent,  who  won't  or 
don't  deliberately  read  ads.  Outdoor  advertising  is  the  black- 
board which  aggressively  forces  your  story  on  the  Great  Indiffer- 
ent— and  they  read  it  without  kiaowing  they  are  being  taught." 

"The  premium  is  your  method  of  substantially  showing  the 
public  that  they  share  in  your  profits.     The  merchant  who  takes 

Premiums-  ^^^  ^^^  ^^.  ^^^^  *^  ^ive  you  a  cash  discount.    Since 
Mr.  Hulh  that  cash  discount  would  be  too  small  if  carried  out 
bard,      to  the  five-and-ten-cent  purchases,  the  only  way  to 
Riker-     give  it  is  to  give  the  'coupon'  for  the  small  sum,  so 
uegeman  ^^^^  ^^^^  enough  coupons  are  collected  the  worth- 
while discount  on  all  purchases  is  obtainable.    The 
fact  that  one  hundred  million  dollars'   worth  of  premiums 


ADVERTISING  MEDIUMS  S75 

art  manufactured  and  distributed  annually  is  proof  of  the 
advertising  and  general  commercial  value  of  the  premium 
method." 

"The  street-car  ad  is  unescapably  persistent.  It  meets  you 
m  the  morning,  travels  around  with  you  during  the  day,  and 
Streetcars:  follows  you  home  at  night.  It's  the  Pinkerton  de- 
Bert  Moses  tective  of  advertising.  Moreover,  you  don't  have 
to  consider  readers'  editorial  prejudices  as  you  may  in  other 
medmms.  There  are  no  Republican  or  Catholic  or  vegetarian 
street  cars.  Also  you're  never  overshadowed  by  a  bigger  ad- 
vertiser than  you.  Everybody  gets  the  same  sized  ad—and  it's 
just  a  question  of  matching  your  wits  against  the  other  fellow's 
so  that  your  ad  can  have  a  more  attractive  layout,  colors,  etc. 
And  you  can  reproduce  your  own  trademark  or  package  or 
colors  to  the  life." 

"If  you  don't  use  the  trade  papers  there's  little  use  of  your 
using  other  media.     For  the  local  merchant  whose  good  will 
Trade     ^^"  haven't  secured  through  trade  papers,  and  whom 
Papers:    ^^^  haven't  educated  to  the  quality  and  uses  of  your 
J.  E.  Kres'  product  through  trade  papers  can  undo  all  the  influ- 
mer  ''Mer-  ence  you  have  been  at  such  cost  to  build  in  the  com- 
'"r?^     munity.     SeU  the  merchant  first.     He  will  push  and 
Journal"  ^commend    and    build   confidence    in   your   goods. 
Moreover,  by  using  trade  papers  you  know  you  are 
getting  to  the  right  type  of  merchant.    The  dealer  who  pays 
anywhere  from  $2  to  $5  per  year  for  his  trade  paper  is  the  pro- 
gressive type  of  merchant  whom  it's  worth  while  for  you  to 
reach. 

"But  remember  this  one  thing.  The  retail  merchant  is  not 
a  pawn.  Don't  try  to  coerce  him,  for  it  won't  work.  He's 
getting  to  a  higher  standard  of  merchandising  every  day  and 
he's  demanding  more,  and  unless  you  meet  him  on  a  high  level 
and  co-operate  intelligently,  you'll  never  get  the  benefit  of  his 
mfluence  with  the  local  public." 

The  remaining  articles  which  we  shall  quote  in  this  chapter 
may  be  gathered  into  two  separate  groups:  (1)  A  summary  of 
the  year's  progress  in  certain  mediums,  and  (2)  A  consideration 
of  some  disputed  medium  questions. 


• 


376 


ADVERTISING  MEDIUMS 


ADVERTISING  MEDIUMS 


377 


tl 


(1)   A  StJMMAKY  OF  THE  YEAR*8  PROGRESS  IN  CERTAIN  MEDIUMS 

The   year's   advance   in   newspaper   advertising   usually   is 
1  News-   summed  up  very  compactly  in  the  annual  and  direc- 
paper  Ad-  tory  covering  this  field  issued  by  N.  W.  Ayer  &  Sons, 
verti^nif    Philadelphia. 

♦The  total  number  of  publications  of  all  kinds  in  the  United 
States  listed  by  the  Annual  and  Directory  is  22,977,  a  gain  of  122; 
and  in  Canada,  1,550,  a  gain  of  24.  The  total  number  of  pub- 
lications of  all  kinds  in  both  countries,  including  territories  and 
dependencies,  therefore,  is  24,527.  Of  these  1,574  are  new  pub- 
lications. The  suspensions  and  consolidations  during  the  year 
make  the  net  gain  146.  There  were  started  every  working  day, 
that  is  to  say,  more  than  five  publications,  but  the  net  gain  was 
only  two  a  week. 

It  may  interest  our  readers  to  compare  these  figures  with 
those  for  Great  Britain  given  in  the  new  1914  edition  of  Mitchell's 
Newspaper  Press  Directory,  This  shows  that  at  the  present  time 
there  are  2,540  newspapers  in  the  United  Kingdom,  London 
possessing  468, 27  of  which  are  morning  dailies  and  seven  evening 
dailies;  the  English  and  Welsh  provinces  account  for  1,578,  of 
which  46  are  morning  and  81  evening  papers;  Scotland  has  252, 
including  eight  morning  and  ten  evening  daiHes;  and  the  British 
Isles  17,  of  which  five  are  dailies. 

The  number  of  daily  newspapers  hsted  in  the  United  States 
is  2,483,  a  gain  of  seven.  The  gains  were  in  the  New  England 
States,  three;  New  York,  four;  Southern  States,  three;  Pacific 
States,  five.  The  Middle  Atlantic  States  lost  five  and  the  West- 
em  States  three.  The  Middle  West  and  the  outlying  territories 
stood  still. 

Canadian  figures  for  the  dailies  are  a  total  of  163,  a  net  gain 
of  six. 

The  weeklies  stand  34  greater  in  number  than  for  the  previous 
year,  the  total  number  being  16,266.  All  of  the  gains  were  in 
New  York,  43;  Southern,  21;  Pacific  Slope,  54,  and  outlying  ter- 
ritories, three.  The  losses  by  sections  are:  New  England,  16; 
Middle  Atlantic,  ten;  Middle  Western,  36,  and  Western,  25. 


*Printeri  Ink,  Febnmiy  12.  1914,  p.  46. 


Canada  and  Newfoundland  gained  four  and  now  have  1,057 
weeklies. 

The  monthlies  now  number  2,879,  a  net  gain,  as  stated,  of  27. 
The  gams  show  in  New  England,  eight;  New  York,  23;  Middle 
Atlantic,  one,  and  Pacific  slope,  13.  The  losses  are  sustained  in 
these  sections:  Southern,  eight;  Middle  Western,  four;  Western, 
four;  outlying  territories,  two.  In  Canada  and  Newfoundland 
the  total  number  of  monthlies  is  227,  a  net  gain  of  ten. 

It  is  interesting  to  note  that  the  smaller  classifications  as  of 
semi-weekhes,  fortnightlies,  semi-monthlies,  and  quarterlies  have 
reversed  their  tendency  to  diminish  in  number.  The  semi- 
monthlies registered  the  large  net  gain  of  34,  practically  all  of  it 
being  made  in  the  Southern,  Middle  Western,  and  Western  States. 
The  quarterly  gams,  on  the  other  hand,  were  made  chiefly  in 
New  York,  the  Middle  Western,  and  Western  States.  The  only 
loss  in  the  ten  classifications  was  that  of  the  bi-monthlies,  a  net 
of  eight. 

Each  of  the  24,527  newspapers  and  periodicals  listed  is  de- 
scribed in  ten  distinct  items,  including  the  circulation  rating  and 
the  population  figures  for  the  town  where  it  is  published.  The 
towns  covered  are  11,629,  an  increase  of  100.  This  includes 
both  countries. 

The  corresponding  figures  covering  the  year  1914  are  as 
follows: 

♦The  1915  edition  of  N.  W.  Ayer  &  Son's  American  News- 
paper  Annual  and  Directory  lists  24,724  publications  of  all 
sorts.  For  the  first  time  in  its  history  this  standard  list  of 
Amencan  and  Canadian  publications  appears  without  any 
advertismg.  The  new  publications  are  1,688,  but  against  this 
number  must  be  set  off  suspensions  and  consolidations  sufficient 
to  brmg  the  net  gam  for  the  year  down  to  197,  of  which  7 
belong  in  Canada.     Canada's  total  number  is  1,557. 

The  number  of  daily  newspapers  in  the  United  States  is  now 
placed  at  2,502;  of  weeklies,  16,323;  and  monthlies,  2,981,  an 
increase  in  each  mstance.  The  only  classes  to  lose  are  in 
fbrtnighthes  and  semi-monthlies,  which  now  stand  at  57  and 
291.  respectively. 

In  Canada  the  daiHes  number  159,  the  weeklies  1,057,  and 

*Pnntcrs'  Ink,  January  7,  1915,  p.  56. 


I 


378 


ADVERTISING  MEDIUMS 


I 


the  monthlies  243.    There  was  a  slight  loss  in  the  number  of 
dailies. 

The  number  of  dailies  by  sections  is  as  follows:  Middle 
Western  States,  635;  Western  States,  450;  Southern  States, 
405;  Middle  Atlantic,  291;  Pacific  Slope,  283;  New  York.  211; 
New  England,  182;  outlying  territories,  45.  The  Middle  At- 
lantic States  were  the  only  sections  to  lose  in  number;  the  loss 
was  slight. 

In  the  field  of  the  weeklies,  the  Western  States  have  5,259; 
the  Middle  Western  States,  3,316;  the  Southern  States,  3,154; 
Pacific  Slope,  1,414;  Middle  Atlantic,  1,258;  New  York,  1,117; 
New  England,  759;  and  outlying  territories,  46.  New  York 
made  the  considerable  gain  of  43,  and  there  were  small  gains 
or  losses  in  the  other  sections. 

The  Middle  Atlantic  States,  which  lost  in  the  number  of 
dailies  and  weeklies,  made  the  largest  gains,  49,  in  the  number 
of  monthlies,  which  total  866.     New  York  has  628  monthlies; 
Western  States,  372;  Middle  Western  States,  323;  Pacific  Slope 
227;  New  England,  195;  outlying  territories,  18. 

The  number  of  towns  in  which  newspapers  are  published 
now  reaches  11,817.  The  classified  lists  number  222,  and 
include  such  up-to-date  divisions  as  aeronautics,  movmg  pic- 
tures, Esperanto,  woman  suffrage,  and  anti-suffrage. 

Magazine  advertising  recently  has  been  going  through  a 
transitional  period  and  there  seems  to  be  a  variety  of  opinion  as 
2.  Maga-  to  how  serious  and  permanent  some  of  the  changes 
**"«'  which  have  taken  place  really  are.  In  some  quarters 
these  changes  are  referred  to  as  "the  slump  in  magazine  adver- 
tising." But  many  advertising  men  protest  vigorously  that 
there  has  been  no  slump  and  that  what  looks  like  a  slump  is 
merely  a  readjustment.  The  Advertising  Affliliation  recently 
conducted  a  symposium  on  the  question,  "What  is  the  status  of 
Magazines  and  Magazine  Advertising?  *'  A  stenographic  report 
of  this  printed  in  Advertising  and  Selling  contains  the  following 
views  expressed  by  various  prominent  persons: 

For  a  year  or  more  it  has  been  apparent  that  the  magazine  field  has 
been  going  through  a  transition  period.   Conjectures  and  predictions 


ADVERTISING  MEDIUMS  379 

hive  been  rife,  and  it  was  natural  that  competitive  mediums  should 
be  willing  to  view  the  transition  period  pessimistically. 

Recently  the  subject  has  been  taken  up  analytically  and  authori^ 
tatively,  and  tfiere  is  now  no  furtlier  excuse  for  failure  to  clearly 
understand  exactly  what  the  situation  is. 

At  the  recent  Affiliotion  Convention  of  the  Rochester,  Cleveland, 
Buffalo,  and  Detroit  Ad  Clubs,  Ernian  J.  Ridgway,  of  "Everybody's 
Magazine;'  was  invited  to  speak  on  the  subject,  and  a  discussion 
following  the  address  was  participated  in  by  adveHising  managers, 
agents,  and  others.  This  was  reported  in  shorthand  for  "Advertising 
&  Selling  Magazine.'* 

To  complete  the  authoritative  presentation  of  the  facts,  "Advertising 
<fc  Selling  Magazine"  invited  the  Quoin  Club  to  publish  data  which 
it  had  recently  compiled,  and  present  its  analysis  of  the  situation. 

Since  the  transition  is  quite  evidently  editoriol  in  character,  rather 
than  adveHising,  there  is  also  reproduced  here  a  portion  of  a  thought- 
ful study  of  "  Magazines  and  These  New  Times;'  by  RobeH  Sterling 
Yard,  well  known  in  magazine  editing. 

Taken  altogether,  then,  this  aHide  may  well  be  regarded  as  a  final 
and  complete  study  of  the  status  of  the  jnaganne,  and  as  such  should 
be  carefully  read  by  advertising  men.  \Ed.  Note  by  Editor  of  "Ad- 
rertising  &  Selling."] 

*Some  misconceptions  about  magazine  advertising  have  gained 
unwarranted  credence  during  the  past  two  years.     Where  have 

^rrruzn  J.  l^7J''''^f'?'^l  Probably  from  the  published  figures 
Ridffway's  Of 'ines  of  advertismg  earned,  which  show  a  "slump." 
Talk         «ut  a^cordmg  to  my  figures  there  has  been  no  slump. 
Ihe  pubhshed  figures  simply  show  lines  carried,  but 
they  completely  ignore  the  consideration  that  the  rate  per  line 
may  have  been  very  substantially  increased  during  the  year  in- 
volved in  the  comparison.     If  I  have  been  running  a  hundred 
pages  at  four  hundred  dollars  a  page  and  I  raise  my  rates  to  five 
hundred  dollars  a  page,  I  can  lose  4,500  lines  a  month  and  vet 
receiveas  much  money  35  I  did  before.     U  an  advertiser  ha/an 

*  Advertising  and  Selling,  June.  1915,  p.  9. 


380 


ADVERTISING  MEDIUMS 


4 


appropriation  of  twohundredand  fifty  thousand  dollars  a  year  and 
the  magazines  he  is  using  increase  their  rates  20per  cent., the  adver- 
tiserwillhavetoincreasehisappropriationorcut  down  the  number 
of  lines. 

You  see  how  completely  without  significance  the  number  of 
lines  is,  except  when  taken  in  connection  with  the  rate  per  line. 
For  a  long  time  before  the  war  began  the  total  magazine  circula- 
tions were  increasing  rapidly.  The  advertising  rates  were  being 
raised  and  in  the  process  of  readjustment,  the  number  of  lines, 
as  was  inevitable,  were  going  down,  but  according  to  my  figures, 
and  I  believe  they  are  right,  the  total  aniount  of  actual  money 
spent  in  the  magazines,  so  far  from  slumping,  was  jumping. 

Take  the  pubUshed  figures  for  the  first  four  months  of  1912. 
In  these  four  months  the  weeklies  carried  1,570,215  lines  of  ad- 
vertising. Now,  in  the  first  four  months  of  1914,  the  same  pub- 
lications carried  1,354,609  lines.  That  is  a  slump  in  the  number 
of  lines  carried  by  the  weeklies  of  14  per  cent,  in  two  years. 

Now,  let  us  look  at  the  dollars.  In  the  first  four  months  of 
1912  the  amount  of  money  paid  by  the  advertisers  to  the  week- 
lies was  $3,994,940.  For  the  same  four  m<5nths  in  1914,  with  14 
per  cent,  fewer  lines,  the  advertisers  paid  the  weeklies  $4,213,687. 
That  is  a  jump  of  5|  per  cent,  in  the  cash.  Notice  that  while 
the  number  of  lines  carried  went  down  215,606,  the  niunber  of 
dollars  in  four  months  went  up  $218,749. 

When  you  look  at  the  records  and  notice  that  in  four  months 
the  weeklies  have  lost  two  hundred  and  fifteen  thousand  lines, 
on  the  face  of  it,  it  looks  bad  for  the  weeklies,  but  when  you  dis- 
cover that  the  advertiser  actually  paid  two  hundred  and  eighteen 
thousand  dollars  more  to  the  weeklies  for  the  smaller  space, 
instead  of  the  space  in  the  weeklies  losing  caste  with  the  adver- 
tiser, the  exact  reverse  is  true. 

Space  in  the  weeklies  has  greatly  enhanced  in  value  in  the  eyes 
of  the  advertiser.  Why?  Probably  because  of  the  increased 
circulation.  A  significant  factor  completely  ignored  by  those 
relying  on  the  published  figures. 

in  arriving  at  the  dollars  in  this  comparison  and  in  all  the  other 
comparisons  I  shall  make,  I  have  used  the  line  rates  of  all  the 
magazines,  the  line  rates  quoted  for  the  months  and  years  com- 
pared. In  the  time  I  had  it  was  impossible  to  get  the  exact 
amounts  from  all  the  publishers  of  all  the  magazines.  The 
amounts  are  not  important.  It  is  the  comparative  showing  we 
are  after,  and  using  the  line  rates  for  both  periods  seemed  to  me 


ADVERTISING  MEDIUMS 


381 


to  be  the  quickest  and  fairest  method.     If  there  is  any  unfairness 
it  would  probably  favor  the  earlier  periods. 

I  am  using  the  first  four  months  of  1914  for  my  comparison 
instead  of  the  first  four  months  of  1915,  because  it  is  impossible 
for  any  one  to  even  estimate  how  much  influence  the  war  has  had 
on  advertising.  According  to  the  published  figures  the  number 
of  lines  of  advertising  carried  in  all  magazines  in  the  first  four 
months  of  1915  is  about  10  per  cent,  under  1914.  If  that  is  all 
the  effect  the  war  has  had  upon  magazine  advertising,  it  would 
seem  to  me  that  magazine  advertising  has  established  a  new 
record  for  stabiHty  and  merit,  for  what  other  business  not  feeding 
directly  on  the  war  is  there  in  this  whole,  broad  land  that  has 
lost  only  10  per  cent,  of  its  trade.^ 

Unless  I  am  the  victim  of  a  misconception  even  greater  than 
the  misconception  about  magazine  advertising,  the  slump  in 
general  busmess  due  to  the  war  is  more  than  10  per  cent.  If  it 
IS  more  than  10  per  cent.,  and  every  man  here  knows  what  the 
facts  are  m  his  own  line  of  business,  magazine  advertising  makes 
a  splendid  showing  in  the  comparison. 

I  am  consparing  1914  with  1912  instead  of  comparing  1915 
with  1912,  because  the  period  in  1914  immediately  before  the 
war  permits  of  a  fairer  comparison,  unaffected  by  the  war. 

In  the  first  four  months  of  1914  the  women's  magazines  ear- 
ned 1,205,543  lines,  while  in  the  same  four  months  of  1912  they 
carried  1,154,317  lines,  a  gain  in  1914  of  51,226  lines.  The  cash 
received  for  the  first  four  months  of  1914  was  $3,885,274,  while 
m  1912  It  was  only  $3,660,594,  a  gain  in  lines  of  fifty-one  thou- 
sand over  1912,  and  a  gain  in  dollars  of  two  hundred  and  twenty- 
four  thousand  over  1912;  in  other  words,  the  women's  magazines 
not  only  increased  the  rates  and  dollars,  as  the  weeklies  did,  but 
increased  the  number  of  fines.  Surely  a  remarkable  exploit. 
Ihe  gain  m  actual  cash  by  the  women's  magazines  for  the  first 
four  months  in  1914  was  something  over  6  per  cent. 

The  published  figures  for  the  class  magazines  show  that  they 
carried  m  the  first  four  months  of  1914,  1,266,229  lines.  In  the 
same  four  months  of  1912,  1,365,924  lines.  That  is  ninety-nine 
thousand  less  lines  m  1914  than  in  1912,  showing  a  percentage  of 
about  half  the  slump  shown  by  the  weeklies.  The  dollars  re- 
ceiv^  for  the  first  four  months  in  1914  were  $1,017,581.  For 
the  first  four  months  in  1912  the  dollars  were  $1,011,928.  A 
gain  of  $5,600  in  1914  as  compared  with  1912. 

The  pubUshed  figures  of  the  general  magazines  showed  for  the 


382 


ADVERTISING  MEDIUMS 


ADVERTISING  MEDIUMS 


first  four  months  of  1914,  1,239,284  lines.  For  the  first  four 
months  of  1912, 1,367,075  lines.  That  is  one  hundred  and  forty- 
seven  thousand  fewer  lines  in  1914  than  in  1912.  In  dollars  the 
general  magazines  received  in  the  first  four  months  of  1914, 
$2,149,251.  In  1912,  $2,178,537.  That  is  twenty-four  thousand 
dollars  less  in  1914  than  in  1912. 

One  hundred  and  forty-seven  thousand  fewer  lines  and  twenty- 
four  thousand  fewer  dollars,  showing  that  the  rates  had  advanced 
considerably  in  the  meantime,  with  a  loss  of  practically  1  per 
cent,  in  cash.  So  that  this  great  slump  in  magazine  advertising 
which  you  have  asked  me  to  come  up  here  and  explain  resolves 
itself  into  a  huge  slump  of  1  per  cent,  in  the  actual  cash  received 
by  the  general  magazines.  A  gain  of  J  per  cent,  in  the  cash 
received  by  the  class  magazines.  A  gain  of  something  over  6 
per  cent,  in  the  cash  received  by  the  women's  magazines,  and  a 
gain  of  5j  per  cent,  in  the  cash  received  by  the  weekly  maga- 
zines. 

Summing  up,  the  published  figures  show  that  in  the  first  four 
months  of  1914  all  the  magazines  carried  5,116,691  lines.  For 
the  first  four  months  in  1912  all  the  magazines  carried  5,528,557 
lines.  A  loss  of  four  hundred  and  eleven  thousand  lines,  or 
something  over  7  per  cent. 

According  to  my  figures  the  dollars  received  by  all  the  maga- 
zines in  the  first  four  months  of  1914  were  $11,265,775.  For  the 
same  four  months  in  1912  the  dollars  were  $10,841,559.  A  gain 
of  $421,416,  or  4  per  cent. 

Which  means  that  if  the  same  ratio  between  cash  and  lines 
continued  for  the  full  years  of  1912  and  1914,  and  they  did  so 
continue,  that  this  so-called  terrific  slump  in  magazine  advertis- 
ing amounts  to  an  actual  gain  of  approximately  $1,264,248  in 
magazine  advertising  in  1914  over  1912. 

There  has  been  no  slump  in  magazine  advertising.  Therefore, 
there  can  be  no  causes  back  of  the  slump  in  magazine  advertising. 

TABLE  SHOWING  RELATIVE  FLUCTUATION  OF  BUSINESS  CONDITIONS 

AND  MAGAZINE  ADVERTISING 


883 


Year 
1900 

XQIO 
XQIZ 

XQia 


Lines 

Magazine 

Advertising 

z  3,8x2,656 

14,862.784 

15.705,505 

XS.S30,8S1 
15,400.970 

U,S45,24a 


Bank 
Clearings 
$165,838,191 
164,095.229 
160,230,773 

173,953,915 
169,815,701 
155,341.126 


U.  S.  Steel 

New 

Bonds  Traded 

Building 

UnfiUed 

Securities 

on  Stock 

Operations 

Tonnage 

Issued 

Exchange 

$615,342,000 

3.542,595 

$2,439,656,870 

$i^Ji7.i50,ooo 

530.745,466 

5,402,514 

1,678,147,570 

634,722,850 

537,862,637 

3.319,588 

1,329,616,845 

890,210,100 

554,209.785 

5,379.578 

1,786,986,170 

675,213.500 

498,572,309 

7,651,013 
4,764,648 

968,788,31s 

501,571,020 

462,780,833 

964,157,200 

46i,jaa,ooe 

M«UIM5 


I 


ttf* 


Compiled  for  the  Quoin  Club, 
By  The  Business  Bourse, Ints.Inc I 


(See  chart  on  next  page.) 


Therefore,  your  committee  has  asked  me  to  give  the  causes  for  a 
condition  which  does  not  exist. 

You  all  know  how  trying  business  conditions  were  for  many 
months  previous  to  the  war.    You  all  know  how  business  men. 


.1 


S84 


ADVERTISING  MEDIUMS 


before  we  knew  there  was  to  be  a  war,  hoped  and  prayed  that 
business  had  touched  bottom,  and  yet  at  the  very  time  when 
business  seemed  in  the  worst  condition  it  could  possibly  be  in, 
the  magazines  were  carrying  more  business  than  they  were  cariy^- 
ing  two  years  before,  more  business  than  they  had  ever  carried 
before.  Your  committee  might  well  have  asked  me  to  come 
liere  and  discuss  the  magnificent  showing  the  magazines  were 
making,  showing,  as  it  did,  actual  and  substantial  gains  in  the 
teeth  of  acute,  and  almost  universal,  business  depression. 

The  condition  of  a  magazine  and  its  prospects  can  never  be 
determined  simply  by  the  number  of  lines  of  advertising  it  is 
carrying,  nor  even  by  the  cash  it  is  receiving,  nor  by  the  circula- 
tion alone  nor  by  the  contents  alone,  but  by  all  these  taken 
together,  plus  the  personality  or  personalities  back  of  it.  The 
same  thing  is  true  in  very  nearly,  if  not  every  kind,  of  business. 

Edgar  G.  Criswell,  Executive  Manager  of  the  Quoin  Club,  at- 
tended the  AMiation  meeting  in  Rochester.  After  his  return 
to  New  York  he  gave  Advertising  &  Selling  Magazine 
^h^Qumn  ^.^^  following  statement,  as  giving  a  more  extended 
view  of  the  opinion  of  the  magazine  publishers: 
"Looking  over  the  whole  magazine  field  it  seems  to 
me  there  are  still  other  considerations  than  number  of  lines  car- 
ried worth  thinking  seriously  about.  The  experienced  buyer  of 
space  these  days  cares  little  whether  a  particular  magazine  he  is 
using  has  more  or  less  lines  of  advertising  at  a  certain  time.  He 
didn't  buy  the  space  because  of  the  showing  in  lines,  but  because 
of  his  belief  in  the  magazine's  popularity  with  and  influence  upon 
the  people  who  read  it. 

"The  amount  of  money  he  pays  for  the  space  is  in  direct  pro- 
portion to  the  number  of  copies  sold,  and  the  number  of  lines  of 
his  and  other  people's  advertising  is  unimportant.  The  pub- 
lishers got  this  idea  a  number  of  years  ago.  They  used  to  talk 
quantity  of  circulation  only,  but  they  came  to  realize  that  quan- 
tity is  only  one  of  the  dimensions  of  the  value  which  the  adver- 
tiser bought,  so  the  publishers  investigated  to  find  the  kind  and 
location  of  their  readers,  and  developed  quality  and  distribution 
as  characteristics  that  meant  more  than  mere  quantity  of  cir- 
culation. It  is  so  with  lines  of  space.  As  a  basis  for  selection 
of  a  periodical  as  an  advertising  medium,  it  is  only  one  of  three 
or  four  considerations. 

"After  all,  though,  the  really  important  consideration  is  just 


Cluh'i 
Vieu> 


ADVERTISING  MEDIUMS 


385 


this:  Are  the  magazines  as  a  general  class  rendering  a  service 
to  readers  that  warrants  their  use  as  advertising  mediums?  The 
answer  is  certainly,  *Yes.*  Editorially,  artistically,  and  typo- 
graphically the  magazines  of  to-day  are  better  than  ever.  They 
render  a  greater  measure  of  service  to  readers  than  ever.  They 
are  intrinsically  more  valuable. 

"  Run  over  the  various  classes  a  moment.  The  women's  maga- 
zines are  immensely  important  in  the  home  life  and  work  of 
hundreds  of  thousands  of  women.  They  reach  homes  along 
every  rural  mail  route,  and  in  every  village,  town,  and  city  in  this 
country.  Our  purely  literary  magazines  are  fresh  and  vigorous. 
The  Atlantic  occupies  a  place  of  increasing  influence.  The 
North  American  Review  is  lustily  celebrating  its  100th  anniver- 
sary right  now.  The  fiction  magazines,  both  in  low  and  high 
priced  classes,  are  reaching  a  widening  circle  of  readers,  and  are 
giving  as  good  stuff  as  ever,  much  more  interestingly  presented. 

"The  review  type  of  magazines  are  unquestionably  stronger 
and  more  influential  than  they  have  ever  been.  The  weeklies 
are  being  printed  faster  and  are  more  timely.  The  strictly 
class  magazines  lead  the  pubUshing  world  for  beauty.  And  so 
it  is  all  through  the  field  of  periodicals — they  are  doing  their 
jobs  more  efficiently,  more  broadly,  and  are  interesting  a  steadily 
increasing  number  of  people — men,  women,  and  children. 

"Those  are  the  really  great  reasons  for  magazines  as  advertis- 
ing mediums.  No  publication  lives  on  advertisements  alone. 
It  is  the  service  it  renders  in  conveying  interesting  and  valuable 
information  which  causes  people  to  become  its  devoted  readers, 
and  through  that  relationship  arises  its  value  to  the  advertiser. 

"  In  the  gradual  broadening  of  the  area  of  influence  of  maga- 
zines in  America  there  is  every  reason  to  feel  that  they  are  closer 
to  the  people  than  ever,  and  that  really  is  the  answer  to  any 
questions  of  slump  in  advertising.  If  there  is  any  slump  in  lines  it 
has  its  own  local  cause — the  war,  for  instance.  Fundamentally, 
the  magazines  are  better,  saner,  stronger,  more  helpf ulthan  ever. 

"  But  even  along  the  line  of  figures,  following  Mr.  Ridgway 's 
lead,  there  are  still  more  interesting  facts.  The  Business  Bourse 
reports  to  us  a  very  uniform  showing  for  magazine  advertising 
covering  the  six  years  1909-1914,  contrasted  with  other  stand- 
ard business  factors  (see  chart,  page  383),  inclusive,  demonstrat- 
ing that  in  volumes  it  has  a  very  unusually  even  course. 

"Those  are  figures  that  make  you  feel  glad  that  you  are  in  the 
magazine  business,  rather  than  to  envy  the  man  who  has  a  seat 


(i 


$m 


AD\1ERTISING  MEDIUMS 


on  the  Stock  Exchange,  which,  by  the  way,  has  declined  in  value 
in  recent  years  from  $95,000  all  the  way  down  to  $34,000. 

"The  latest  report  of  gross  railroad  earnings  from  July,  1914, 
to  March  31,  1915,  show  a  decrease  of  5|  per  cent. 

"No  magazine  has  failed  and  the  banks  have  not  kept  open 
after  3  o'clock  looking  after  their  needs. 

"So,  you  see,  it  would  be  mighty  strange  if  magazine  figures 
did  not  show  a  decline  when  so  many  other  lines  of  business  are 
falling  off  for  very  good  and  sufl&cient  reasons. 

"As  it  is,  magazine  figures  are  a  remarkably  straight  line  on  the 
chart  of  business." 

My  company  is  deeply  indebted  to  the  magazines  for  what 
measure  of  success  we  have  attained;  but  I  speak  in  no  spirit  of 
crusade  for  the  magazines,  but  of  suggestion. 

Wheeler  ^  examination  of  the  advertising  data  compiled  on 
Advertinng  100  leading  magazines  for  the  last  five  years  reveals 

Manager,  little  indication  of  a  slump.  Here  are  figures  on  100 
Pompeian  leading  magazines,  weekly,  general,  women's,  and  class 

Ci^m  niagazines:  1910,  eighteen  and  one  half  million  lines 
of  advertising;  1911,  nineteen  million  lines;  1912,  nine- 
teen and  one  half  million  lines.  Those  figures  unanalyzed 
sp>ell  increase,  not  slump. 

The  magazine  figures  for  1913, 1914,  and  1915  show  a  decrease, 
but  perhaps  no  greater  than  the  ratio  of  decrease  in  general 
business  conditions.  Why,  then,  was  I  assigned  to  a  topic  that 
seems  questionable  in  its  major  premise? 

In  the  kindling  wood  of  our  magazine  advertising  records  there 
is  an  Ethiopian  gentleman.  In  the  past  five  years  he  has  grown 
from  a  child  to  a  giant  in  advertising  circles.  His  name  is  Mr. 
Automobile  Advertiser.  He  and  his  great  family  of  tires,  tops, 
chains,  horns,  starters,  axels,  bearings,  oils,  etc.,  etc.,  have  cre- 
ated a  great  problem  of  new  and  special  advertising,  which  con- 
ceals in  the  total  figures  an  undeniable  slump  in  general  magazine 
advertising. 

So,  back  of  the  cold  figures  and  behind  the  scenes,  there  must 
be  many  a  story  of  general  magazine  advertising  kept  up  to  a 
fair  volume  at  an  excessive  cost  to  the  publisher  and  by  a  deal 
of  prodding  of  the  ribs  of  the  advertiser.  I  know.  My  ribs 
have  been  sore  for  five  years. 

Whatever  decrease  in  magazine  advertising  there  is  may  be 
due  to  the  law  of  diminishing   returns.      If   there   were   50 


ADVERTISING  MEDIUMS 


387 


dreamers  five  years  ago  who  thought  they  could  capture  a  na- 
tional market  over  night  with  much  space  and  big  spreads  and 
httle  distribution,  then  there  are  only  200  left  to-day,  and  they 
are  harder  to  find  and  less  susceptible  to  the  misguided  enthu- 
siasm of  many  advertising  agents,  many  magazine  solicitors,  and 
many  advertising  managers,  who  know  as  much  about  merchan- 
dising a  product  as  a  layman  does  about  building  a  submarine. 

A  well-conceived,  economical,  and  rapid-fire  plan  of  distribu- 
tion prevents  untold  thousands  of  dollars  of  publicity  wasting 
oflF  into  the  blue  sky.  The  goods  must  be  there  when  Mrs. 
Consumer  asks  for  them. 

I  know  a  national  advertiser  who  put  out  a  product  which  had 
distribution  in  22,000  stores  (about  50  per  cent,  of  his  possible 
market)  before  he  had  allowed  himself  to  spend  more  than 
$5,000  in  publicity.  He  tells  me  that  the  remaining  23,000 
dealers  will  come  much  harder  because  he  has  won  the  live  ones 
first,  but  further  states  that  he  will  have  80  per  cent,  distribution 
before  he  has  spent  $10,000  in  publicity. 

Until  more  national  advertisers  plan  their  work  and  then 
work  their  plan  as  did  the  above  advertiser,  the  law  of  diminish- 
ing returns  will  leave  less  and  less  dreamers  for  the  magazines 
to  tease  into  becoming  big  space  users  while  the  advertisers  are 
still  in  swaddling  clothes. 

The  law  of  diminishing  returns  is  also  leaving  fewer  advertisers 
to  take  those  big  one-time  spreads  in  popular  magazines  to  fool 
the  trade.  The  trade  is  wiser  now  than  it  was.  It  does  not 
stock  up  when  it  sees  the  proof  of  a  flash-in-the-pan  insert  in 
colors. 

The  passing  of  the  big-space  dreamer  and  the  big-space  bluffer 
leaves  less  money  for  the  magazines  pro  tem,  but  leaves  the  ad- 
vertising world  with  a  sounder  digestion  for  future  labors. 
Don't  understand  me  to  say  that  all  the  magazines  are  all  to 
blame.  Most  of  the  magazines  are  much  to  blame;  most  of  the 
agents  are  much  to  blame;  conditions  are  much  to  blame.  Most 
Americans  want  to  get  rich  to-day;  they  cannot  wait  till  to- 
morrow, and  advertising  is  chosen  as  the  lightning  goat. 

A  second  cause  is  competition.  There  are  far  too  many  maga- 
zines for  their  own  good  or  for  the  good  of  advertisers.  It  is 
almost  as  disgraceful  to-day  for  a  rich  man  not  to  have  his  string 
of  magazines  as  it  was  years  ago  for  him  not  to  have  a  string  of 
two-minute  steppers. 

Too  much  magazine  advertising  means  over-selling.     Over- 


i' 


S88 


ADVERTISING  ^^lEDIUMS 


selling  of  space  means  another  job  for  the  advertising  casket- 
maker.  That  means  another  little  slump  in  the  volume  of  ad- 
vertising. Too  many  magazines  in  the  field  mean  too  many  on 
the  consumer's  table.  If  you  have  one  or  two  magazines  a  month 
you  will  undoubtedly  give  them  more  attention,  read  the  ads 
more  closely  than  if  you  have  six  or  eight.  The  average  maga- 
zine-reading family  takes  a  fraction  less  than  four  magazines. 

A  third  and  closely  kindred  cause  for  the  slump  in  magazine- 
advertising  strength  is  the  wealth  of  poor  circulations  produced 
largely  by  competition  among  magazines.  Advertising  managers 
are  much  to  blame  for  these  weak-kneed,  inflated  circulations. 
We  advertising  managers  share  the  common  American  size- 
delusion.  Bigness  rather  than  quality  is  our  constant  demand. 
The  magazines  respond  nobly.  By  the  signing  of  a  check  a 
magazine  can  add  a  hundred  thousand  circulation.  Several 
circulation-getting  bureaus  can  deliver  a  100,000  circulation 
almost  over  night.  Needless  to  say,  such  circulation  is  worth 
about  25c  on  the  $1.  I  buy  it.  You  buy  it.  Some  day  we 
will  wake  up.     I  have  got  one  eye  open  already. 

Other  factors  are  (1)  the  movies,  (2)  the  automobile  riding 
habit,  and  (3)  price-cutting.  To  show  how  important  is  the 
latter  factor,  it  is  only  necessary  to  tell  you  that  in  one  city  alone 
price-cutting  reduced  the  sales  of  Ingersoll  watches  $30,000  per 
year.  In  another  city  a  five-block  section  where  price-cutting 
was  active  reduced  sales  $2,500. 

To  sum  up.  For  the  good  of  the  magazines  themselves,  as 
well  as  the  advertisers,  there  must  be  fewer  magazines,  less 
forced  circulations,  better  merchandising,  less  of  big  space 
mania,  better  audits,  and  price  maintenance. 

For  the  past  five  years  I  have  handled  advertising  which  has 
shown  a  regular  annual  increase,  both  in  lines  and  expenditure, 
and  that  never  less  than  $100,000. 

Lee  An-  The  most  rabid  critic  of  the  magazine  does  not  claim 
derson,  ex-  a  falling  off  of  more  than  18  per  cent,  in  magazine 
^/m^  lineage  in  the  past  five  years.  We  have  heard  the 
a£s!tdes?^^^^^^^^^  that  there  has  been  an  increase  of  84  per  cent. 
and  Adver-  ^  outdoor  advertising  in  the  same  time.  Meanwhile, 
tising  If  on- there  has  been  an  ever-greater  increase  in  direct-by- 
ager.  Hupp  mail  advertising,  and  nearly  as  great  an  increase  in 
AutovuMe  street-car  advertising.  To-day  the  advertiser  has  a 
division  of  interests — more  mediums.    And  at  the  same  time 


1 


ADVERTISING  MEDIUMS 


389 


appropriations  are  still  made  on  the  basis  of  the  total  volume  of 
business  just  as  they  were  five  years  ago.  While  mediums  have 
been  increasing  in  efficiency  and  number,  appropriations  still 
remain  about  the  same  or  with  only  moderate  increases. 

Something  has  been  said  about  circulation.  I  assert  confi- 
dently that  the  time  is  not  far  distant  when  the  advertising 
manager  who  knows  his  job  will  not  ask  a  magazine  simply, 
how  much  circulation  have  you,  but  rather,  "How  much  have 
you;  where  have  you  got  it,  and  how  did  you  get  it?'* 

Personally  I  shall  never  again  buy  space  in  a  magazine  which 
has  more  than  15  j)er  cent,  clubbing  circulation.  That  is,  I  shall 
never  consciously  buy  it.  I  place  the  figures  at  15  per  cent., 
because  the  rates  usually  give  that  much  excess,  and  if  there  is 
15  per  cent,  clubbing  it  costs  us  little  or  nothing. 

I  shall  never  consciously  buy  any  magazine  which  has  even  1 
per  cent,  of  circulation  secured  on  the  deferred  payment  plan. 
That  I  consider  next  to  valueless. 

In  a  word,  I  shall  never  buy  any  magazine  whose  circulation 
I  am  convinced  is  seciu*ed  on  any  forced  basis. 

I  do  commend  such  moves  as  has  recently  been  made  by 
Everybody's.  And  I  feel  that  no  advertiser  should  wilfully  lessen 
the  income  of  magazines  already  on  his  schedule  when  they  take 
steps  such  as  Mr.  Ridgway  has  taken — for  such  moves  all  make 
for  the  improvement  of  the  quality  of  magazine  circulation  and 
for  more  honest  statements  of  the  quantity  of  circulation. 

In  conclusion,  slump  or  no  slump,  I  am  convinced  that  as  long 
as  goods  are  sold  the  magazines  will  always  be  the  foundation  of 
any  wide  national  distribution.  They  always  have  been,  they 
are  to-day,  and  they  always  will  be.  Meanwhile,  the  develop- 
ment of  advertising,  the  ramifications  of  general  business,  and 
the  growth  of  the  country  are  bringing  up  new  mediums  right 
alongside  the  magazines,  and  as  time  goes  on  all  of  them  are 
bound  to  show  increases  unless  we  all  suddenly  decide  to  stop 
advertising  and  go  out  of  business. 

The  advance  in  standards  from  almost  every  angle  has  been 

us  marked  in  the  case  of  trade  journals  aslt  has  been  in  any  field. 

s.  Techni-    Whereas  a  few  years  ago  the'number  of  really  valuable 

oil        trade  journals  was  comparatively  few,  to-day  the  field 

Journals    jg  occupied  by  a  number  of  pubHcations  which  are  re- 

ijarded,  throughout  the  trade  which  they  represent,  as  being  in- 


I 


soo 


ADVERTISING  MEDIUMS 


dispensable  reflections  of  the  growth  of  the  trade  or  industry. 
Not  only  has  this  evidence  been  marked  in  the  case  of  the  edito- 
rial side  of  the  publication,  but  the  advertising  columns  have  risen 
to  the  same  high  standards  in  many  instances.  Some  of  these 
journals  have  not  been  as  swift  as  others  to  respond  to  what 
might  be  called  "the  new  development"  in  this  field,  but  the 
betterment  is  going  on  at  a  rapid  rate.  Trade  journals  may 
be  said  to  be  receiving  more  serious  study  by  advertisers  than 
ever  before. 

Arthur  F.  King,  Advertising  Manager  of  the  Marion  Steam 
Shovel  Company  of  Marion,  Ohio,  has  worked  out  a  formula 
for  deciding  the  value  of  space  in  trade  and  technical  journals. 
This  formula  he  describes  in  the  following  article: 

*If  some  evening  you  will  take  home  with  you  an  armload  of 
trade  and  technical  papers  and  study  them  for  an  hour  or  two 
you  will  surely  arrive  at  the  conclusion  that  advertising  in 
these  mediums  is  being  done  according  to  a  set  of  very  loose 
standards. 

Every  advertising  man,  doubtless,  recalls  many  instances  that 
prove  this.  I  recall  having  seen  in  a  supposedly  good  paper  a 
page  containing  three  different  advertisements.  One  half  of 
the  page  advertised  a  steam  roller,  a  quarter  advertised  the 
products  of  a  nurseryman,  and  the  other  quarter  was  used  by  a 
steamship  company.  Certainly  two  of  those  three  advertisers 
were  wasting  money. 

The  current  issue  of  one  of  the  papers  coming  to  my  desk  con- 
tains two  advertisements  for  tires  for  pleasure  cars — both  big 
advertisers,  too — and  the  whole  paper,  editorial  and  advertis- 
ing pages,  is  devoted  to  the  work  of  the  highway  engineer  and 
road  contractor. 

Trade  and  technical  paper  space  must  be  used  to  stimulate 
sales;  and  to  do  this  the  paper  should  be  favorably  read  by  the 
greatest  number  of  persons  who  are  a  real  authority  in  purchas- 
ing. T\Tien  we  are  fishing  we  do  not  cast  just  anywhere  in  the 
lake;  we  hunt  up  a  place  that  looks  "  fishy."  In  other  words,  we 
investigate,  then  we  concentrate. 


♦Pnnter**  Irk,  June  3.  1915.  p.  58. 


ADVERTISING  MEDIUMS 


391 


It  is  impossible  to  discriminate  intelligently  in  buying  space, 
however,  unless  judgment  may  be  based  on  a  thorough  analysis 

...    of  trade  papers.     The  very  term  "trade  paper"  im- 

of  Mediums  p^^^^  specialization — a  medium  aimed,  concentrated. 

Is  Required  if  you  please,  on  a  relatively  small  group  of  firms  or 

of   Trade-  individuals  who  together  make  up  a  distinct  trade  or 

paper  Ad-  (jjvision  of  business. 

Accordingly,  if  the  advertiser  is  to  secure  real  value 
in  the  space  he  buys,  he  must  first  carefully  analyze  the  factors 
that  govern  value  of  circulation.  They  are:  first,  the  field 
covered  and  the  relative  standing  of  the  paper  in  the  field; 
second,  the  quantity  of  circulation;  third,  the  quality  of  circu- 
lation; and  fourth,  the  distribution  of  circulation.  Let  us  ex- 
amine these  four  factors  more  closely,  since  they  determine  the 
kind  and  amount  of  circulation  data  we  will  require. 

In  order  to  determine  the  field  a  paper  serves  and  its  relative 
standing  in  the  field  we  must  make  a  first-hand  investigation. 
In  this  the  advertiser  must  draw  largely  from  his  own  knowledge 
of  the  field,  using  as  a  supplementary  aid  a  reliable  directory. 
The  further  points  to  be  covered  in  an  analysis  of  this  first 
factor  are  the  competing  papers  in  the  same  field,  their  distin- 
guishing characteristics,  their  editorial  policies,  their  advertising 
policies,  their  development  during  a  period  of,  say,  five  years 
immediately  foregoing. 

A  more  or  less  complete  list  of  competing  media  is  usually  to 
be  found  within  the  advertiser's  own  knowledge.  In  determin- 
ing the  distinguishing  characteristics,  however,  we  encounter 
more  diflaculty.  For  example,  physical  makeup  plays  an  im- 
portant part;  the  ratio  of  editorial  and  advertising  pages,  the 
amount  of  illustrative  material  used,  the  kind  of  paper,  press- 
work,  etc.,  all  have  a  share  in  governing  the  strength  of  a  paper 
in  any  particular  field.  Such  data,  although  easy  to  secure,  are 
rather  difficult  to  compare.  Their  importance,  however,  should 
not  be  overlooked  in  our  analysis. 

The  editorial  policies  of  the  media  in  any  field  certainly  war- 
rant careful  investigation,  for  they  are  vital  in  determining  rel- 
ative strength,  since  the  strength  of  any  trade  or  technical  paper 
lies  not  so  much  in  the  size  of  its  subscription  list  as  in  the  inti- 
macy of  its  editors  with  its  readers.  Editorial  matter  should  be 
studied  from  two  angles,  one  as  to  comprehensiveness,  forceful- 
ness,  and  accuracy,  and  the  other  as  to  its  "human-interest" 
s\de. 


•I 


i 


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892 


ADMERTISING  MEDIUMS 


A  good  trade  or  technical  paper  should  mean  more  to  its 
readers  than  an  extra  hour  or  two  each  week — more  than  mere 

business. 
Mar^Tkan     p^^,,  ^^h  nothing  in  them  but  business  get  dull 

BudZss  and  wearisome.     They  should  be  kept  alive  and  read- 
able through  proper  editorial  handling. 

They  should  contain  more  pertinent  humor,  biography,  etc. 
They  should  be  edited  from  the  field  and  not  from  a  dusty  desk 
in  one  comer  of  the  publisher's  office. 

All  of  these  points  make  or  break  the  strength  of  business 
journals  and  their  advertising  value. 

Few  advertisers  consider  the  advertising  policies  of  the  media 
they  use.  The  reader's  confidence  in  the  advertising  pages  is 
directly  proportionate  to  the  logical,  truthful  advertisements 
in  the  paper.  Advertisers  should  determine  definitely,  there- 
fore, just  how  publishers  view  boastful,  extravagant  advertising; 
patent,  trademark,  or  copyright  controversy,  and  all  advertising 
that  works  against  the  best  interests  of  advertisers  as  a  whole. 

On  tracing  the  history  of  the  development  of  a  medium  the  ad- 
vertiser, again,  has  to  draw  largely  from  his  own  knowledge  and 
observation.  It  is  only  logical  to  assume  a  paper  showing  a 
good,  healthy  development  in  past  years  will  be  a  good,  healthy 
medium  for  your  advertising,  and,  by  the  same  token,  a  paper 
showing  a  gradual  decline  will  represent  a  potential  danger  and 
waste.  It  is  rather  essential  that  past  records  be  investigated 
if  we  are  to  discriminate  wisely  in  buying  space. 

The  second  factor  that  governs  the  value  of  circulation  is 
quantity  of  circulation.  Generally  speaking,  total  paid  circu- 
lation is  all  that  advertisers  should  consider  of  value,  although 
in  many  publications  a  part  of  the  unpaid  circulation  may  be 
valuable. 

For  example,  the  better  grade  of  papers  have  a  number  of 
regular  contributors  of  current  news  items  who,  although  they 
are  of  the  same  class  as  the  paid  subscribers,  receive  the  paper 
free  of  charge.  Many  publishers  follow  the  practice  of  sending 
regular  copies  of  their  pap>ers  without  charge  to  trade  or  pro- 
fessional societies  and  libraries.  Also,  a  certain  percentage  of 
the  sample  copies  sent  out  by  the  better-grade  publishers  in 
their  subscription  work  is  valuable  to  the  advertiser.  Aside 
from  these,  however,  there  is  little  else  of  value  to  the  average 
advertiser. 

After  an  analysis  of  quantity  has  been  made  we  are  concerned 


ADVERTISING  MEDIUMS 


308 


with  quality,  the  third  factor,  which  is  perhaps  the  most  impor- 
Painia  on  ^^^nt  among  the  entire  four,  for  without  quality  the 
Judging    quantity  does  not  count  for  very  much. 
Quality  of      The  elements  which  underlie  the  factor  of  quality 
Circulation  ^^^  roughly  be  classed  under  four  heads:   First,  the 
paper's   relation  to  trade  or  professional  associations;  second, 
its  percentage  of  subscription  renewals;  third,  its  percentage  of 
subscribers  in  arrears,  and  fourth,  its  methods  for  securing  sub- 
scribers.    These  warrant  brief  consideration. 

Let  us  consider  first  the  relation  of  a  trade  or  technical  paper 
to  an  association  in  the  same  field. 

It  goes  without  saying  that  all  media  are  more  or  less  related 
to  the  associations  in  their  respective  fields;  but  we  are  not 
particularly  concerned  with  that  phase  of  the  subject.  The 
official  organ  of  any  association  is  typical  of  the  class  I  have  in 
mind.  Generally  speaking,  journals  in  official  relation  to  an 
association  are  edited  by  the  scissors  and  paste-pot  method, 
and  accordingly  have  no  weight  with  their  readers.  As  a  mat- 
ter of  fact,  there  is  almost  always  some  paper  better  than  the  offi- 
cial organ  in  the  same  field.  Then,  again,  the  official  organ  is 
usually  sent  free  or  its  subscription  price  is  included  in  the  asso- 
ciation's dues,  which  means  that  the  circulation  is  virtually  in 
the  unpaid  class.  And  generally  what  a  man  does  not  pay  for 
he  is  not  interested  in.  There  are  exceptions,  of  course,  but 
they  are  few  and  far  between. 

The  second  element — ^percentage  of  renewals — can  scarcely 

be  emphasized  too  much.    An  advertiser  is  quite  safe  in  assum- 

'PJ^g      ing  a  large  percentage  of  renewals  to  indicate  the 

"Heart    paper's  relative  hold  on  the  readers,  which  in  terms 

Test"  of  of  advertising  means  relatively  high  value;  and,  by 
Circulaiion  ^.j^g  same  token,  a  low  percentage  of  renewals  indi- 
cates a  relatively  low  value  as  an  advertising  medium;  and,  what 
is  more,  a  constantly  changing  audience,  which  defeats  the  whole 
principle  of  i>ersistence  in  advertising. 

Percentage  of  subscriptions  in  arrears — the  third  element — 
indicates  much  as  to  the  strength  of  a  paper  among  its  readers, 
and  is  to  be  judged  by  the  same  standards  as  jjercentage  of 
renewals.  These  two  make  up  the  "heart  test"  of  circulation, 
and  it  is  to  the  advertiser's  profit  if  the  papers  on  his  list  have 
"strong  hearts." 

The  quality  of  circulation  is  to  be  determined  very  largely, 
also,  by  the  paper's  method  of  securing  subscriptions.     All  of 


I 

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3§4 


ADVERTISING  MEDIUMS 


us  have  listened  to  a  great  deal  of  discussion  about  forced  circu- 
lations. In  the  case  of  some  advertising  media,  "forcing"  has 
little  relation  to  advertising  value;  but  with  trade  and  technical 
papers  such  methods  are  almost  siire  to  decrease  it. 

The  very  term  "forced"  seems  to  imply  a  subscription  se- 
cured at  sacrifice  of  quality.  The  publisher  of  a  trade  or  techni- 
cal paper,  no  matter  how  beneficial  his  editorial  matter  may  be, 
can  never  build  a  circulation  of  real  value  to  the  advertiser  un- 
less he  secures  his  subscribers  on  the  basis  of  what  he  really  is — 
or  should  be — selling,  namely,  editorial  contents.  The  use  of 
premiums  in  subscription  work  generally  indicates  one  of  two 
weaknesses:  either  the  editorial  contents  alone  are  not  of  suffi- 
cient value  to  sell  subscriptions,  or  the  circulation  is  so  low  as  to 
require  forcing.     In  either  case  the  advertiser  "  pays  the  freight. " 

Subscription  solicitation  by  mail,  by  canvasser,  by  agency,  by 
contest,  etc.,  are  much-discussed  topics.  To  my  mind^  however, 
it  is  possible  for  publishers  to  get  quantity  at  a  sacrifice  to  quality 
by  any  method.  The  advertiser  should  concern  himself  not  with 
the  method,  but  with  the  motive  behind  and  the  results  of  the 
solicitation. 

The  fourth  factor  in  determining  the  value  of  circulation  is  the 

distribution.     Distribution   includes  and  is  divided  into  two 

.     classes:    (1)  geographic,  and  (2)  according  to  business 

afcirada'  or  relative  position  in  business.     Geographic  classifi- 

iion  "  cation  of  distribution  may  be  made  in  a  great  number 

of  ways.     For  example,  by  section,  by  state,  by  cities 

of  certain  size,  etc. 

The  second  form  of  classification — that  is,  according  to  busi- 
ness or  position  in  business — leads  to  a  division  of  papers  into 
two  classes.  Publications  that  are  trade  pwipers  in  every  sense 
of  the  word,  and  which  confine  their  circulation  to  only  one 
business  or  trade,  can  make  their  classification  only  on  the  rela- 
tive position  of  subscribers.  Such  a  classification  would  run 
somewhat  like  this :  owners,  managers,  buyers,  etc. 

A  great  many  pubHcations  are  not  confined  to  one  single  busi- 
ness or  trade,  however,  and  therefore  their  classification  must 
be  made  in  two  parts:  First,  according  to  diflFerent  lines  of  work 
served;  and,  second,  according  to  relative  position  of  sub- 
scribers in  those  lines.  A  classification  of  this  nature  would  be 
in  the  case,  let  us  say,  of  an  iron  and  steel  paper,  first,  by  busi- 
ness, as  iron  mines,  blast  furnaces,  manufacturing  concerns, 
railroads,  etc.;  and,  second,  as  to  position,  such  as  managers, 


ADVERTISING  MEDIUMS 


395 


engineers,  buyers,  master  mechanics,  etc.  In  cases  of  the  latter- 
named  papers,  where  there  is  a  considerable  diversification  of 
circulation,  there  is  a  tendency  among  some  publishers  to  classify 
several  weaker  trades  under  a  single  group  and  thus  make  an 
apparently  strong  showing,  when,  in  reality,  the  trade  or  line 
of  work  in  which  the  advertiser  is  most  interested  may  be  but  a 
small  proportion  of  all  that  is  included  in  one  group.  Here  the 
advertiser  may  be  easily  misled. 

Having  now  analyzed  circulation,  we  must  next  determine 
the  sources  from  which  data  may  be  secured. 
Where  to       ^°    °^y    work    I    have   found  eight  sources  from 
Look  fen-  which  data  may  be  obtained  and  verified.     I  shall 
Circulation  outline  them  one  at  a  time — not  necessarily  in  the 
^'^      order  of  their  importance,  however. 
Naturally,  the  first  source  is  in  the  field  itself  where  the  num- 
ber of  firms  or  individuals  limit  the  circulation  of  the  field's 
media.     This  enables  us  to  make  a  definite  check  on  circula- 
tion figures.     Second  is  the  Post-office  Department.     Through 
the  post  office  we  are  able  to  verify  much  of  the  data  seciu'ed 
through  other  sources.     As  a  carrier  the  department  requires 
publishers  to  submit  semi-annual  statements  regarding  their 
publications;  and  their  value  and  relation  to  the  advertiser  may 
best  be  determined  by  a  brief  outline  of  its  requirements.     It 
requires  the  following  conditions  upon  which  a  publication  shall 
be  admitted  to  second-class  postage  rate: 

It  must  be  regularly  issued  at  stated  interv^als,  as  frequently  as 
four  times  a  year,  bear  a  date  of  issue,  and  be  numbered  consec- 
utively. It  must  be  issued  from  a  known  office  of  publication. 
It  must  be  formed  of  printed  paper  sheets  without  board,  cloth, 
leather,  or  other  substantial  binding.  It  must  be  originated  and 
pubHshed  for  the  dissemination  of  information  of  a  pubhc  char- 
acter, or  devoted  to  literature,  the  sciences,  arts,  or  some  special 
industry,  and  have  a  legitimate  list  of  subscribers.  It  must  not 
be  published  primarily  for  advertising  purposes,  or  for  free  cir- 
culation. 

The  Post-office  Department  insists  that  publishers  mail  only 

10  per  cent,  of  their  circulation  sent  to  paid  subscribers  as  free 

Sample    ^^  sample  copies.     A  pubhsher  is  allowed  to  send 

and  Ex-   copies  of  his  paper  to  subscribers  who  have  not  paid 

change    subscriptions  for  one  year;  that  is,  he  is  allowed  one 

Copies    year  to  collect  his  money  for  a  renewal  or  from  a  new 

subscriber  who  has  signed  a  legitimate  order  for  his  subscription. 


1 


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.VDXTERTISING  MEDrcMS 


Exchanges  are  considered  legitimate  copies,  as  they  are  a  rate 
of  pay.  Advertisers*  copies  are  considered  as  paid  copies,  be- 
cause a  publisher  must  be  permitted  to  send  copies  of  the  paper 
to  his  advertisers,  so  they  may  be  able  to  verify  the  insertion 
of  their  advertisements,  although  the  department  does  not  look 
upon  the  sending  out  of  a  promiscuous  number  of  copies  to 
advertisers  with  favor.  It  says  that  only  enough  copies  should 
be  sent  to  the  advertisers  to  enable  them  to  check  up  and  verify 
the  insertion  of  their  advertisements. 

If  the  Post-office  Department  is  furnished  information  that 
a  pubUsher  is  misrepresenting  the  number  of  copies  he  is  sending 
out  to  paid  subscribers  it  will  investigate  the  matter,  and  if  it  is 
found  that  the  publisher  is  misrepresenting  and  is  not  furnishing 
a  true  statement  to  the  post  office  of  his  sample  copies  and  his 
paid  subscriptions,  his  paper  is  excluded  from  the  second-class 

privilege.  .11 

These  things  happen  in  rare  cases,  of  course,  because  it  is  liara 
to  prove  such  thmgs  against  a  publisher;  but  it  has  happened, 
and  the  department  pushes  it  pretty  thoroughly  when  given  in- 
formation tliat  can  be  investigated  and  verified.  Of  course,  the 
department  does  not  voluntarily  go  out  and  investigate  things 
in  regard  to  publications.  It  goes  under  the  assumption  that 
the  pubUsher  is  honest,  unless  he  is  proved  otherwise;  and  \ery 
much  depends  upon  the  local  postmaster.  It  is  possible  to  ^'ct 
things  through  with  postmasters  in  some  cities  and  towns  that 
could  not  be  passed  at  all  in  others. 

Every  six  months  pubUshers  have  to  report  to  the  post  office 
who  the  editor  and  the  business  manager  of  the  paper  are;  also 
the  stockholders  in  the  company  and  their  post-office  addresses. 

The  third  source  of  data  is  to  be  found  in  the  solicitors  for 
competing  journals.  Many  times  these  men  unconsciously  drop 
remarks  that  may  throw  light  on  a  point  the  advertiser  has 
been  trying  to  get  for  weeks.  Fourth,  letters  to  the  names  on 
the  advertiser's  maiUng-list  often  help  to  secure  a  lot  of  data. 
Fifth,  if  not  colored  by  personal  prejudice,  data  from  non- 
competing  advertisers  may  prove  of  help.  Sixth,  the  firms 
who  print  trade  or  technical  papers  can  often  throw  light  on 
circulation  figures — at  least  total  circulation.  This  recalls  an 
instance  of  a  publisher  makmg  a  claim  of  12,000  total  circulation 
when  his  printer's  bill  showed  6,500  to  be  the  average  press- 
run. 

The  seventh  source  of  data  is  to  be  found  in  the  Audit  Bureau 


ADVERTISING  ^XEDHIMS 


307 


of  Circulations,  of  Chicago.  We  all  have  heard  a  great  deal  of 
favorable  and  unfavorable  talk  about  the  A.  B.  C,  but  the  fact 
that  it  is  supported  by  some  of  the  broadest  and  keenest  adver- 
tisers, agents,  and  publishers  in  the  country  would  seem  to  indi- 
cate that  it  might  soon  become  the  standard  for  every  one.  In 
a  number  of  cases  at  the  present  time,  however,  advertisers  find 
it  expedient  to  use  certain  papers  not  members  of  the  bureau — 
and  it  must  be  admitted  that  there  are  several  good  paf)ers  in 
that  class.  This  necessitates  the  use  of  a  data  sheet  prepared 
by  the  advertiser — the  eighth  source  of  data. 

The  tendency  these  days  seems  to  be  largely  toward  data  and 
not  the  intelligent  use  of  it.  In  the  case  of  some  advertisers, 
securing  data  has  developed  into  a  kind  of  ceremonial  to  be  in- 
dulged in  at  the  expense  and  inconvenience  of  the  publisher. 
But  data — just  plain  data  in  the  files — are  worth  absolutely 
nothing  unless  they  can  be  made  to  assist  in  a  more  logical  se- 
lection of  media.  Accordingly,  an  advertiser's  data  sheet  should 
be  prepared  only  after  a  careful  analysis  of  requirements  has 
Ix^n  made — an  analysis  similar  to  the  one  made  in  the  first  part 
of  this  paper.  If  this  is  done  the  essential  points  will  be  cov- 
ered, and  neither  the  advertiser  nor  the  publisher  will  be  incon- 
venienced unduly. 

In  the  sheet  with  which  the  writer  has  worked,  sixteen  spe- 
cific questions  are  designed  to  secure  all  the  essential  data  on 
,  circulation,  subscription  methods,  distribution,  etc. 
Dalafrmn  ^^^^^  from  thcsc  scvcral  other  questions  furnish  us 
Publdhers  ^^^^  information  as  to  discounts,  closing  dates,  etc. 
Space  is  also  provided  for  an  affidavit  to  be  made  by 
the  publishers,  and  in  no  case  is  any  statement  given  con- 
sideration unless  the  affidavit  is  made. 

The  sheet  is  sent  to  publishers  from  four  to  six  weeks  before 
the  list  is  made  up,  and  with  few  exceptions  it  is  returned 
promptly.  Among  those  returned  a  few  are  not  properly  filled 
in  and  they  are  resent  in  order  to  give  the  publisher  a  fair 
chance  to  bid  for  business. 

After  the  sheets — or  rather  the  majority  of  the  sheets — are 
returned  the  data  are  tabulated  and  graded,  according  to  a 
definite  standard,  in  much  the  same  manner  as  a  college  in- 
structor would  grade  his  examination  papers.  The  standard  of 
grading  is  based  on  the  analysis  made  previously. 

To  illustrate,  let  us  take  the  case  of  two  papers  in  a  certain 
field  (this  is  an  actual  case,  although  the  names  are  withheld 


It 
I 


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' 


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898 


ADVERTISING  IVXEDIUMS 


for  obvious  reasons)  which,  for  convenience,  we  shall  designate 
as  "A"  and  "B." 

"A"  is  the  older  of  the  two  papers  and  it  has  undergone  no 
changes  in  ownership  or  policy  during  a  number  of  years.  Its 
total  circulation  is  5,833  and  its  paid  subscribers  number  4,375. 
Ninety-five  per  cent,  of  its  subscribers  are  renewals,  and  its  cir- 
culation is  60  per  cent,  among  owners,  30  per  cent,  among 
managers,  and  10  per  cent,  among  superintendents.  No  geo- 
graphical distribution  of  circulation  figures  is  given,  however, 
which  makes  it  hard  for  us  to  determine  where  the  paper  cir- 
culates. 

Subscribers  are  solicited  both  by  mail  and  by  personal  call, 
and  premiums  are  extensively  employed.  The  paf)er  is  the 
official  organ  of  the  trade  association  in  the  same  field,  although 
the  dues  in  the  association  do  not  include  a  subscription.  A 
surprisingly  large  number  (40  per  cent.)  of  subscribers  are  in 
arrears.  For  years  "A"  was  the  only  publication  in  the  field, 
and  for  a  long  time  was  a  thoroughly  live  and  reliable  paper; 
but  during  recent  years  it  has  shown  a  marked  decline  both  edi- 
torially and  in  point  of  advertising  carried. 

Typographically  it  is  bad,  and  the  paper  used  in  it  is  of  very 
poor  quality,  as  is  also  the  presswork.  Illustrations  are  the  ex- 
ception rather  than  the  rule;  and  the  editorial  pages  are  coming 
more  and  more  to  contain  a  lot  of  "write-ups'*  and  "free 
readers,"  rather  than  strong,  forceful,  constructive  matter  per- 
taining to  the  business  it  serves.  "A's"  grade,  figured  for  the 
1915  list,  is  given  below. 

"B"  has  a  total  circulation  of  4,695,  and  its  paid  subscribers 
number  3,286.  Ninety-five  per  cent,  of  its  subscribers  are 
renewals;  and  its  circulation  is  90  per  cent,  among  plant- 
owners. 

Geographically,  the  circulation  is  distributed  proportionally 
as  to  centres  of  the  industry.  Subscribers  are  obtained  only 
through  mail  solicitation  and  no  premiums  are  used.  "B" 
is  in  no  way  connected  with  any  association  in  the  field.  Be- 
tween 2  and  3  per  cent,  of  subscribers  are  in  arrears. 

Typographically,  the  paper  is  very  poor,  but  as  to  illustra- 
tions, presswork,  paper,  etc.,  it  is  far  above  the  average.  Edi- 
torially, "B"  is  coming  to  hold  a  high  place,  for  its  matter  is  the 
kind  that  will  be  read  and  studied.  It  is  a  comparatively 
young  paper,  but  its  development  has  been  healthy  and  appar- 
ently substantial. 


ADVERTISING  MEDIUMS  399 

The  grades  for  both  "A"  and  "B"  are  given  below.  Before 
giving  them,  however,  it  might  be  well  to  say  that  a  paper  fail- 
ing to  make  a  grade  of  75  per  cent,  is  not  given  a  place  on  our 
list: 

Points  Covered  ("A")  ("B") 

Makeup q  i 

SUnding *  * '  *  [  g  j 

Editorial  policy 8  8 

Advertising  policy s  -j 

Development q  £ 

Total  circulation 5  4 

Paid  circulation 20  15 

Percentage  of  renewals 10  10 

Percentage  in  arrears 3  5 

Trade  relations q  iq 

Subscription  solicitation  methods 10  20 

Distribution  (geographical) .' .  0  5 

Distribution  (relative  position) * .' .  4  5 

Total ~^    ~^ 

In  cases  where  there  are  a  number  of  high-grade  journals  in 
the  same  field  an  elimination  may  be  made,  5  it  is  necessary, 
either  by  dropping  those  of  lowest  grade  or  by  determining  rela- 
tive value  through  advertising  rates. 

We  are  compelled  to  do  this  in  the  engineering  field,  where 
there  are  a  number  of  really  good  papers.  The  formula — which, 
as  is  known,  is  used  by  a  number  of  advertisers — ^is  v = c  X  p;  V 


f» 


being  value,  C  being  paid  circulation,  P  being  percentage  of 
purchasing-power  circulation,  and  R  being  current  page-rate. 
For  one  engineering  paper  the  formula  would  work  out  Uke 
this:  Value  equals  18,681  multiplied  by  .24  and  divided  by 
65.00  (which  equals  about  69).  By  figuring  the  "V"  for  all 
engineering-field  papers  and  eliminating  the  lowest,  we  are  able 
to  trim  our  list  as  is  found  necessary. 

And  now  as  to  the  results  of  this  selective  process:  First,  the 
advertiser  gains  a  more  positive  knowledge  of  the  field  and  may, 
accordingly,  prepare  and  run  his  copy  more  intelligently. 
Second,  he  is  able  to  eHminate  waste  to  a  large  degree,  placing 
his  business  where  it  will  really  bear  fruit.  Third,  he  does  not 
have  to  plan  his  campaign  along  the  same  lines  as  his  competi- 
tor's, for  his  course  is  already  plotted  along  safe  and  sane  lines. 


( 


t 


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. 

i 


400 


ADVERTISING  MEDIUMS 


If  the  competitor  is  using  space  in  a  paper  that  has  not  shown 
up  well  under  investigation  all  the  better,  there  will  be  just 
that  much  less  money  to  spend  in  good  media.  Fourth,  the  ad- 
vertising manager  can  meet  his  superiors  with  the  knowledge 
that  he  is  really  spending  his  appropriation  in  trade  journals 
wisely — as  if  it  were  his  own. 

All  of  these  things,  and  more,  come  as  the  result  of  choosing 
trade  papers  intelligently.  It  means  a  lot  of  work,  of  course, 
but  the  results  well  justify  it. 

For  use  in  connection  with  articles  bought  by  the  consumer  in 
small  units  and  for  many  lines  of  specialties,  the  street-car  card 
4.  Street'  has  come  to  have  an  accepted  place  of  large  importance 
cat  Adver-  among  the  advertising  mediums.     The  following  un- 
tinng     signed  article  gives  some  idea  of  how  the  street-car  ad- 
vertising business  is  conducted  under  modern  conditions: 

*When  an  advertiser  is  using  publications,  it  is  a  simple  mat- 
ter for  him  to  secure  proof  of  insertion.  The  checking  depart- 
ment of  his  advertising  agency  or  his  own  advertising 
department  merely  checks  up  the  date  of  insertion,  size  of  ad- 
vertisement and  position.    That  ends  that. 

But  for  an  advertiser  who  is  using  the  street  cars  to  secure  ab- 
solute proof  of  insertion  is  "something  else  again."  Not  that 
the  proof  isn't  there,  but  that  it  isn*t  quite  as  easy  to  unearth 
it  as  it  is  with  magazines  or  newspapers,  especially  if  one  is  of 
the  disposition  that  has  to  be  "shown." 

The  matter  of  size  is  simple  enough,  all  cards  being  of  the 
regulation  size,  11 X21  inches. 

"Position"  is  seldom,  if  ever,  requested  by  advertisers,  so 
that  matter  scarcely  ever  comes  into  question.  "Position"  is 
purely  a  matter  of  judgment  on  the  part  of  the  "carders"  (the 
men  at  the  car  barns  who  insert  the  cards  in  the  cars),  their  in- 
structions being  that  light  and  dark  cards  shall  alternate  as  far 
as  possible. 

Street-car  advertising  in  New  York  and  other  large  cities  is 
sold  on  the  basis  of  "runs"— a  "full,"  "half,"  "third."  "quar- 
ter" or  "eighth  run"  on  all  the  lines  operated  or  on  any  in- 
dividual line  or  lines  that  the  advertiser  may  choose. 

-  Ill  I         ^ 

*  Printers"  Ink,  January,  21,  1915,  p.  90. 


ADVERTISING  ]VIEDIUMS 


401 


^  Mr.  John  Doe  has  just  signed  a  contract  for  street-car  adver- 
tising in  New  York  City.  His  contract  calls  for  a  "full  run" 
on  Broadway  and  a  "half  run"  on  the  Fourth  and 

ru!!t  Z  Madison  Avenue  lines — which  is  to  say  that  a  Doe 

Calls  for  ^^rd  Will  appear  m  every  car  operated  on  the  various 
branch  lines  which  make  up  the  Broadway  system 
and  in  one  half  of  the  number  of  cars  operated  on  the  Fourtli 
and  Madison  Avenue  line,  as  long  as  the  contract  has  to  run. 

After  Mr.  Doe  has  O.  K*d  the  text  matter  and  design  for  his 
cards,  they  are  printed  or  lithographed,  as  the  case  may  be,  and 
then  delivered  to  the  stockrooms  of  the  street-car  advertising  com- 
pany at  the  car  barns,  where  they  are  assigned  to  the  "Doe  bin." 

Mr.  Doe  may  write  his  own  text  matter,  he  may  originate  the 
design  and  have  his  own  artist  execute  the  art  work;  and  he  may 
have  his  cards  printed  by  a  printer  of  his  own  choosing.  Or  the 
street-car  advertising  folks  will  attend  to  all  of  those  matters  for 
him.     In  either  event,  Doe  pays  the  bill. 

About  25  per  cent,  more  cards  are  printed  than  are  actually 
required  in  accordance  with  the  terms  of  the  contract.  That  is 
done  for  a  threefold  reason:  first,  to  take  care  of  the  matter  of 
cards  that  have  to  be  replaced  through  becoming  soiled  or  torn; 
secondly,  to  provide  cards  for  Mr.  Doe's  own  use;  and  thirdly, 
to  enable  Doe  to  take  advantage  of  the  custom  prevalent  in 
street-car  advertising,  whereby  the  unsold  space  in  the  cars  is 
divided  pro  rata  among  the  various  advertisers. 

Doe's  cards  are  now  at  the  car  barns  ready  to  be  inserted  in 
the  cars. 

It  is  eight  o'clock  at  night — the  time  at  which  the  carders 

generally  begin  their  work  (although  there  is  a  day  force  for  emer- 

,       gency  work).     The  force  of  about  twenty  carders  is 

the  Cards   assembled,  ready  to  receive  their  assignments  from  the 

chief.     Doe's  cards  must  show  in  the  cars  to-morrow 

according  to  the  terms  of  the  contract. 

Now,  Mr.  Doe's  cards  go  in  every  Broadway  car.  That's  all 
right — there's  no  trouble  about  that.  But  what  particular 
card  must  come  out  of  every  Broadway  car  in  order  to  make 
room  for  a  Doe  card.^ 

How  do  the  carders  know  which  particular  cars  on  the  Fourth 
and  Madison  Avenue  line  Doe's  cards  go  in?  And  how  do  they 
know  which  particular  cards  are  to  be  replaced  by  Doe's  .^^ 

The  system  is  foolproof. 

In  the  oflSce  of  the  street-car  advertising  company  there  are 


' 


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ADVERTISING  MEDIUMS 


sheets  prepared  which,  when  filled  out,  are  virtually  a  diagram 
of  every  car  by  number  and  by  line  and  which  constitute  a  per- 
manent oflBce  record  in  loose-leaf  book  form.  That  is,  a  look 
at  any  of  these  sheets  will  tell  exactly  the  advertisers'  cards  that 
are  in  any  car  in  the  city. 

When  it  is  considered  that  there  are  about  2,946  street  cars 
in  New  York  City  being  operated  over  108  individual  lines  and 
branch  lines  which,  collectively,  extend  over  between  500  and 
600  miles  of  track;  that  in  each  car  there  are,  on  the  average,  28 
cards;  and  that  in  a  considerable  number  of  cars  changes  of 
cards  are  being  made  every  day;  then  the  enormity  of  the  detail 
connected  with  the  putting  in  and  taking  out  of  street-car  cards 
becomes  a  little  more  understandable. 

A  few  years  ago  John  Wanamaker's  cards  in  the  New  York 

street  cars  were  changed  every  day.    At  fom*  o'clock  each  after- 

Wanamah-  '^^^^  ^^^  printing  of  the  cards  for  the  following  day 

ers  Daily  was  begun,  and  that  same  night  the  finished  cards  were 

Cards  in  delivered  to  the  bams  for  insertion  in  the  cars.    This 

the  Street  daily  Wanamaker  advertising  was  the  only  instance 

^*"'*      of  its  kind,  so  far  as  is  known,  that  has  occurred  in  the 

history  of  street-car  advertising. 

In  the  oflSce  of  the  car  advertising  company  the  sheets,  which 
form  the  pages  of  the  loose-leaf  record  books,  are  ruled  off. 

For  each  line  in  the  city  there  is  a  separate  book.  At  the  top 
of  the  page  is  written  the  name  of  the  line.  To  the  extreme  left 
of  the  page  the  names  of  all  the  advertisers  on  that  particular 
line  are  written  down,  one  under  the  other.  The  date  is  also 
written  at  the  top  of  each  page. 

At  the  top  of  each  page,  extending  all  the  way  across,  the 
numbers  of  the  cars  being  operated  on  that  particular  line  are 

w«,«  *h.   written. 

^^  The  clerks  in  the  office  who  are  working  on  the 
of  AU  the  sheets  simply  add  Doe's  name  to  the  list  of  adver- 

CaT^  Are  tisers  in  the  Broadway  book  and  in  the  Fourth  and 
^      Madison  Avenue  book. 

Then  they  put  a  mark  (i/)  opposite  Doe's  name  and  under 
every  car  which  is  being  operated  on  the  Broadway  system,  since 
his  contract  calls  for  a  "full  run"  on  Broadway. 

In  the  Fourth  and  Madison  Avenue  book  the  same  mark  is 
made,  but  it  is  made  under  only  one  hoi}  of  the  number  of  cars 
being  operated  on  Fourth  and  Madison  avenues,  since  Doe  has 
contracted  for  only  a  "half  run"  on  that  Une. 


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The  clerk  in  charge  of  the  office  force  might  be  compared,  in  a 
broad  way,  with  the  man  who  "makes  up"  the  advertising 
pages  of  a  magazine.  The  latter  decides  in  what  particular 
place  in  the  publication  a  certain  advertisement  shall  appear; 
the  former  determines  in  what  particular  cars  on  a  certain  line 
an  advertiser's  cards  shall  show. 

When  the  clerk  who  has  checked  off  in  the  books  the  cars  in 
which  Doe's  cards  are  to  appear  has  finished,  she  reads  them  off 
to  another  clerk,  who  records  them  on  separate  slips  of  paper, 
called  "order  slips."  It  is  by  means  of  these  "order  slips" 
that  the  carders  at  the  several  car  barns  throughout  the  city 
are  enabled  to  do  their  work  with  such  speed  and  clocklike 
precision.  But  before  the  work  at  the  car  barns  is  outlined, 
let  us  stay  in  the  office  a  while  longer. 

The  order  slips  are  worked  like  this: 

At  the  top  of  each  slip  the  name  of  the  line  is  printed;  the  slip 
is  ruled  off  into  ten  spaces;  and  at  the  top  centre  of  each  space  is 
printed  the  number  of  the  particular  car. 

Now,  for  every  Doe  card  that  is  put  in  a  car  there  must  be 
another  advertiser's  card  taken  out.  So,  in  each  space  it  is  seen 
that  where  it  says,  "Put  in  Doe,"  it  also  says,  "Take  out  Jones," 
or  "Hopkins,"  as  the  case  may  be. 

Yes,  but  how  does  the  clerk  in  charge  of  the  office  force  know 
which  card,  in  each  car,  to  take  out  so  as  to  allow  for  Doe — a 
newcomer?  you  ask.  And  what  becomes  of  the  card  that  is 
taken  out?  Does  it  go  into  another  car?  Or  if  it  does  not, 
what  becomes  of  it? 

In  an  earlier  paragraph  one  of  the  reasons  given  for  printing 
25  per  cent,  more  cards  than  an  advertiser's  contract  actually 

What.  Is  calls  for  was  the  fact  that  he  is  a  sharer  of  the  unsold 
Don£  vnth  space  in  the  cars.     Now,  when  a  new  advertiser  comes 

Unsold    along,  this  unsold  space  in  the  cars  is  lessened  to  the 

bpace  extent  of  his  contract;  so  the  advertisers  who  are  taken 
out  of  the  cars  to  make  room  for  Doe  are  those  who  have  been 
enjoying,  by  virtue  of  the  custom,  more  space  than  they  were 
actually  paying  for.  So  a  number  of  their  cards  are  removed 
without  any  ado.  The  cards  thus  removed  do  not  go  into  other 
cars;  but  the  car  advertising  people  ask  the  advertisers  what  dis- 
position they  wish  to  make  of  the  cards  that  have  been  taken 
out.  The  cards  are  preserved  in  the  barns  or  destroyed,  just  as 
the  advertisers  say. 

When  all  the  order  slips  for  the  insertion  of  Doe's  cards  in  the 


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Broadway  and  Fourth  and  Madison  Avenue  lines  are  made  out 
they  are  collated  in  the  office  and  set  aside. 

At  five  o'clock  each  afternoon  the  head  of  the  carders  calls  at 
the  office  of  the  car  advertising  company  for  the  order  slips  that 
have  been  made  up  that  day,  Doe*s  among  them.  It  sometimes 
happens  that  as  many  as  twenty-five  or  thirty  different  adver- 
tisers* cards  must  be  changed  in  one  night,  which  keeps  the 
carders  busy  until  all  hours  of  the  morning. 

The  head  carder  is  now  on  his  way  to  the  barn  with  the  order 
shps  to  give  his  men  their  assignments  and  instructions  for  the 

night's  work. 

•v^^frfrt^'      ^^  ^^^  carder  he  hands  over  all  of  Doe's  order  slips. 

*" /X,  *    That's  all  that  carder  has  been  waiting  for.   Over  to  the 

"Doe  bin"  he  hustles,  snatches  a  big  bundle  of  Doe's 

cards  and  is  on  his  way  in  no  time  to  the  empty  cars  in  the  barn. 

As  soon  as  the  carder  takes  out  of  a  car  the  advertiser's  card 
which  is  designated  on  the  order  slip,  he  replaces  it  with  a  Doe 
card.  Then  he  checks  off  his  order  shp  to  show  that  in  that 
particular  car  Doe's  card  has  been  put  in  and  the  correct  one 
taken  out.  He  goes  through  the  same  process  in  every  car  that 
Doe's  order  shps  call  for,  checking  up  each  space  on  the  order 
slips  as  he  goes  along. 

In  some  cases  it  may  require  a  little  rearranging  so  as  to  have 
hght  and  dark  cards  alternating,  but  steady  practice  makes  short 
work  of  that  difficulty  when  it  does  arise. 

In  the  meantime,  another  carder  has  taken  a  bundle  of  Doe 
cards  to  the  Fourth  and  Madison  Avenue  car  bams,  and  the  same 
work  has  been  put  through. 

When  the  insertion  of  Doe's  cards  is  completed  the  carders 
turn  into  the  chief  at  the  stockrooms  the  order  sHps  properly 
checked  off  and,  in  addition,  they  bring  back  with  them  all  the 
cards  which  have  been  ordered  out  of  the  cars  to  make  room  for 
Doe's  cards. 

The  order  shps  are  then  returned  to  the  office  of  the  car  ad- 
vertising company  for  reference. 

From  these  checked-up  order  slips,  as  well  as  by  the  books  of 
record  in  the  office,  advertisers  are  enabled  to  verify  the  insertion 
of  their  cards. 

Every  time  an  advertiser  changes  his  cards — which  may  be  as 
often  as  he  pleases,  but  which  generally  is  done  every  few  months 
— ^the  same  work  is  gone  through  both  at  the  office  and  at  the 
car  bams  as  has  been  here  described.     .     .    . 


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if 


For  food  products  and  other  quick-repeating  lines  the  method 
of  sampling  has  certain  obvious  advantages  as  a  means  for 

6.  Sam-  building  up  business.  G.  W.  Clifford  discusses  in 
piing  the  following  article  some  of  the  methods  which  have 
been  employed  in  sampling  by  concerns  who  have  used  it  suc- 
cessfully: 

*" The  most  successful  sampling  campaign  we  ever  operated," 
says  the  sales  manager  of  a  well-known  soap  concern,  "was  a 
combination  of  house-to-house  solicitation  and  dealer  co-opera- 
tion. 

"This  plan  was  based  on  the  giving  of  premiums  in  the  form 
of  silverware,  in  return  for  coupons  enclosed  with  our  soap.  We 
organized  a  crew  of  salesmen  for  house-to-house  work.  Each 
man  was  equipped  with  a  neat  suitcase  containing  a  full  line  of 
premiums.  When  the  housewife  opened  the  door,  the  salesman 
would  greet  her  in  a  polite  way,  spring  the  catch  on  the  suitcase, 
and  hold  it  out  for  her  inspection.  Silverware  possesses  a  strong 
attraction  for  every  housewife,  and  on  this  our  appeal  was  based. 
*Take  your  pick  of  any  set  of  this  silverware,  madam,'  the  sales- 
man would  say,  *I  want  to  give  it  to  you  free;  it  is  not  for  sale — 
money  cannot  buy  it.  The  only  way  you  can  get  it  is  to  accept 
it  as  a  gift  from  my  firm.' 

"Then  from  his  pocket  he  would  take  a  full-sized  package  of 
our  soap,  open  it,  and  explain  that  a  coupon  was  enclosed  in  each 
package,  a  certain  number  of  which  would  entitle  the  holder  to 
one  of  the  valuable  sets  of  silverware.  Each  prospect  was  given 
a  ticket.  On  representing  this  at  her  grocery  store  and  buying  a 
cake  of  the  soap  she  would  be  given  a  full-sized  cake  free — two 
cakes  for  the  price  of  one. 

"The  ticket  was  in  the  form  of  a  request  to  the  grocer  to  give 
the  holder  a  free  cake  of  the  soap,  provided  she  bought  one  cake 
at  the  same  time,  and  stating  that  we  would  allow  him  the  full 
price  of  a  cake  of  soap  for  each  ticket  sent  in  to  us. 

"Preliminary  work  on  dealers  won  their  interest  in  this  plan, 
for  in  it  they  could  see  certain  sales.  They  were  not  asked  to 
distribute  our  goods  free.  They  obtained  a  double  profit  on 
each  transaction — sl  profit  on  the  sale  of  the  cake  of  soap,  and  a 
free  gift  of  the  full  price  of  the  sample  cake. 

*  Printers*  Inkt  February,  9,  1914,  p.  10, 


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"This  plan  gave  us  two  appeals  to  use  on  the  housewife:  first, 
the  appeal  of  the  free  gift  of  silverware,  and  second,  our  regular 
appeal  on  the  quality,  utility,  and  value  of  the  soap.  Direct  re- 
turns came  in  immediately  from  each  district  in  which  the  plan 
was  operated.  Regular  repeat  orders  followed  as  a  natural  re- 
sult, because  once  started  on  the  proposition,  housewives  felt  no 
inclination  to  discontinue  using  the  soap  regularly,  as  to  do  so 
would  render  valueless  the  premium  coupons  they  already 
possessed.  Apart  from  this  they  needed  soap,  anyhow,  and 
naturally  favored  the  brand  that  offered  them  a  valuable  gift  in 
return  for  regular  use." 

Sampling  methods  of  all  kinds  fall  naturally  into  five  main 
divisions : 

1.  By  mail. 

2.  Through  stores. 

3.  House-to-house. 

4.  Through  professional  men. 

5.  Special  "stunts." 

On  account  of  the  large  number  of  free-sample  offers  contained 
in  the  average  publication,  it  is  becoming  increasingly  diflScult 
to  pull  requests  for  samples  through  the  mail. 

A  typical  example  of  the  way  a  "twist"  is  put  into  a  sampling 

campaign,  operated  through  press  advertising,  is  the  case  of 

A  Ralsum  ^^^*^^P  Wheat  Food.    The  purpose  of  the  magazine 

Pl^^  campaign  this  concern  operated  during  October,  No- 
vember, and  December,  was  to  induce  prospects  to 
sample  and  use  regularly  its  wheat  food.  Prospects  were  not 
asked  to  send  for  a  sample  of  the  food,  however.  Instead,  they 
were  approached  on  their  "bhnd"  side— they  were  invited  to 
enter  their  children  in  a  "development  contest"  and  participate 
in  $500  worth  of  prizes. 

The  bait  in  the  offer  designed  to  pull  inquiries  read :  "Mothers ! 
Ask  us  for  this  development  chart  that  shows  height,  weight, 
and  measurements  of  the  average  boy  and  the  average  girl  from 
1  to  14  years  of  age.  Contains  many  helpful  suggestions  about 
diet  and  the  care  of  children,  and  has  a  tape-line  attachment  for 
accurately  measuring  them;  also  a  place  for  recording  the  yearly 
weight  and  measurements  of  an  entire  family.  Every  mother 
should  have  one.  Write  for  your  free  chart,  and  particulars  of 
our  $500  prize  development  contest  for  children." 

With  each  chart  was  sent  an  application  blank  for  the  develop- 
ment contest.    Directions  read:  "Just  measure  the  height  of 


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your  boys  and  girls  and  weigh  them  on  your  grocer's  scales. 
Then  fill  out  the  entry  blank  attached  hereto,  and  get  your  gro- 
cer to  sign  it.  Mail  the  entry  blank  to  us  promptly,  with  the 
top  of  a  Ralston  Wheat  Food  package  for  every  boy  and  girl 
entered.  When  you  enter  the  children,  let  them  eat  all  the 
Ralston  Wheat  Food  they  want,  and  watch  them  grow."  .  .  . 
Colgate  &  Company  also  operate  a  cleverly  disguised  plan  for 
sampling  their  Nursery  Talc.  The  appeal  is  to  mother  love— 
every  mother  admires  artistic  pictures  of  "cute "  children.  The 
advertisement  shows  a  picture  of  four  pretty  babies,  in  different 
positions,  playing  with  a  can  of  talc,  and  reads,  in  part:  "Colgate 
Baby  Buntings,  13  inches  high,  are  beautiful  decorations  for  the 
nursery  wall.  Children  love  them.  You  may  get  them,  and  a 
trial  of  the  real  Nursery  Talc— Colgate's— for  30  cents  in 
stamps." 

A  combined  method  of  sampling  and  testimonial  getting  is 
operated  by  Johnson  &  Johnson.    In  each  carton  of  their  shaving 
C<miUna'  ^^^P  1^  ^  postal  card,  addressed  to  the  firm,  the  back 
lion      of  which  reads:     "This  card  is  enclosed  in  every  pack- 
Mdhod  of  age  of  Johnson's  Shaving  Cream  Soap,  so  that  the 
Johmon  P^^^^^^  purchaser  may  have  an  opportunity  to  have 
us  send  a  trial  tube  free  to  any  friend  to  whom  he 
wishes  to  recommend  it.     Full-size  tubes,  containing  150  or 
more  shaves,  can  be  bought  from  any  druggist,  or  if  not,  a  re- 
mittance to  us  will  bring  one  postpaid."     Follows  a  blank  that 
calls  for  the  name  and  address  of  the  person  to  whom  the  sample 
is  to  be  sent,  also  the  name  and  address  of  the  person  who  sup- 
plies the  name.     Then  comes  a  blank  headed,  "And  what  do 
you  think  of  Johnson's  Shaving  Soap?" 

The  card  is  enclosed  with  each  sample  sent  out.  Thus  at  one 
stroke  Johnson's  obtain  names  of  prospects  without  spending 
a  single  cent  in  advertising  for  them,  a  testimonial  of  their 
product,  and  what  is  practically  a  personal  letter  of  recommenda- 
tion from  one  friend  to  another. 

Splendid  opportunities  exist  for  sampling  through  retail  stores 
when  the  co-operation  of  dealers  can  be  won.  A  plan  typical 
of  that  used  by  many  concerns  is  operated  by  the  Shredded 
Wheat  Company.  The  dealer  is  impressed  with  the  power  of 
the  sample  as  a  trade  bringer.  Then  he  is  told  that  in  considera- 
tion of  his  placing  an  order  for  a  certain  amount  he  will  be  given 
a  supply  of  special  samples,  each  carton  containing  three  full- 
sized  biscuits,  which  he  can  present  to  his  customers  with  his 


^^f- 


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.-I 


vi 


compliments.  Distribution  of  samples  is  effected  by  placing  one 
of  the  samples  in  each  delivery  of  groceries  for,  say.  a  week. 

This  method  has  a  triple  action.  It  is  a  lever  to  induce  the 
dealer  to  place  a  worth-while  order;  the  dealer's  customers  ap- 
preciate his  sending  them  the  samples,  as  they  are  large  enough 
to  represent  actual  cash  value,  and  the  Shredded  Wheat  Com- 
pany gets  its  samples  right  into  homes  at  no  cost  to  itself . 

Sampling  through  stores  by  means  of  demonstration  booths  is 

a  method  widely  used.     A  girl  demonstrator  is  given  charge  of 

an  attractive  booth,  and  flags  the  attention  of  cus- 

^Th^^^h   *^"^^^^  ^^  *^^  store.     She  gives  a  short,  snappy  talk 

Dimmstra-  °^  *^^  merits  of  her  product,  and  presents  each  person 

turn  Bootfis  with  a  small  sample.     Crystal  Domino  Sugar  samples 

take  the  form  of  a  box  representing  a  domino,  which 

contains  two  pieces  of  sugar.     Gold  Medal  Flour  samples  are 

small  sacks  of  flour,  each  containing  about  a  teacupful  of 

flour. 

Other  concerns  dispense  with  a  demonstration  booth,  and 
leave  it  to  the  store  to  distribute  the  samples.  One  way  in 
which  this  is  done  is  to  place  a  supply  of  samples  on  each  counter, 
together  with  a  placard  inviting  j)eople  to  take  one.  The  clerks 
are  instructed  to  give  one  sample  to  each  customer.  This 
method  is  widely  used  with  proprietary  articles  in  drug  stores. 

Another  method  is  where  stores  hold  "sampHng  weeks."  A 
drug  store  in  Chicago  uses  this  plan  as  a  feature  in  its  advertise- 
ments. 

The  success  of  many  commodities  depends  to  a  large  extent 

upon  the  manufacturers  obtaining  professional  endorsement.    A 

Getting  the  typical  example  of  this  is  the  case  of  a  certain  tooth 

Professional  psLste.     In  addition  to  operating  an  extensive  press 

Endorse-  campaign,  the  manufacturers  work  directly  on  den- 
"**"^  tists  and  physicians  through  salesmen  and  sales- 
women. Many  concerns  employ  graduate  physicians  or  dentists 
for  work  of  this  nature. 

The  procedure  is  generally  to  call  upon  professional  men  and 
explain  the  merits  of  the  product  from  the  professional  stand- 
point. .  .  .  Samples  are  left  for  the  doctor's  or  dentist's 
personal  use.  A  week  or  so  later  the  salesman  returns  and  finds 
out  just  how  it  pleased  the  practitioner.  If  he  is  not  thoroughly 
sold  on  the  merits  of  the  product,  he  is  drawn  out  regarding  his 
objections,  and  these  objections  are  overcome.  When  he  admits 
that  it  is  a  good  thing,  he  is  asked  to  recommend  it  to  his  patients 


and  give  out  samples  as  occasion  arises.    For  this  purpose  a  case 
of  samples  is  shipped  to  him. 

Other  products  are  so  constituted  that  while  professional  en- 
dorsement is  not  absolutely  necessary,  yet  it  helps.  An  instance 
of  this  is  Armour's  grape  juice.  As  this  product  is  said  not  to 
contain  added  cane  sugar,  one  argument  is  that  it  can  be  drunk 
by  diabetics. 

Armour's  work  on  professional  men  is  known  as  "detailing." 
A  strong  salesman  or  saleswoman,  versed  in  medical  lore,  calls  on 
doctors  and  talks  up  the  merits  of  the  grape  juice  in  general,  and 
as  related  to  diabetes  in  particular.  Convincing  data  along 
medical  lines  is  submitted.  Physicians  are  asked  to  recommend 
the  grape  juice  to  their  diabetic  patients,  and  samples  are  shipped 
for  this  purpose. 

Hospitals  also  are  worked  upon  on  much  the  same  Unes  as 
physicians.  The  person  to  see  in  a  hospital  varies  with  each 
institution.  In  some  cases  it  will  be  the  superintendent;  in 
others,  the  buyer,  head  nurse,  or  dietitian.  Food  value  is  talked 
first,  utility  in  diabetes  second,  and  then  price. 

Practically  every  firm  that  samples  regularly  finds  occasion  to 
put  over  a  special  "stunt"  that  is  off  the  beaten  path. 

A  manufacturer  of  a  line  of  toilet  articles  scored  a 

jJ^[f?V   hit  with  a  new  perfume  by  arranging  with  theatres  to 
Th4xt  Paid  ^i^  a  sample  bottle  to  each  programme  given  out  dur- 
ing a  certain  week.     A  printed  slip  wrapped  around 
the  bottle  listed  the  names  and  addresses  of  downtown  stores 
that  carried  the  line. 

The  same  idea  was  used  with  restaurants.  Waiters  were  in- 
structed to  give  each  guest  a  sample  bottle  at  the  time  they 
took  the  order.  Hotels,  too,  were  induced  to  place  a  sample 
bottle  of  the  perfume  in  each  room. 

Another  toilet-goods  house  keeps  tab  on  college  reunions,  and 
mails  to  each  participant  a  neat  carton  containing  a  sample  of 
talcum  i>owder  and  shaving  soap. 

When  W.  K.  Kellogg  placed  his  wheat  biscuit  on  the  market 
he  had  a  sample  biscuit,  wrapped  in  waxed  paper,  placed  in  each 
package  of  his  corn  flakes.  This  simple  method  proved  a  means 
of  building  up  a  considerable  demand  for  the  new  biscuit. 

Church  fairs  offer  an  excellent  medium  for  sampling.  Many 
firms  are  extensive  users  of  this  method.  In  placing  a  new  drink- 
ing chocolate  on  the  market,  one  company  used  church  fairs 
extensively.    An  attractive  booth  was  fitted  up  and  placed  in 


^'g^**^■■^*^^f:^S 


I 


410 


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411 


I  I 


*^ 


li 


charge  of  a  live  saleswoman  with  several  assistants.  One  ad- 
vantage of  church  fairs  is  that  one  need  feel  no  compunction 
about  forcing  goods  on  people.  That  is  what  they  go  there  for— 
to  be  separated  from  their  money.  The  chocolate  firm  in  ques- 
tion made  a  combination  offer — "buy  a  box  of  our  eating  choco- 
late and  we  wiU  give  you  free  a  full-sized  package  of  our  drinking 
chocolate."  A  commission  on  all  sales  was  paid  into  the  church 
fund. 

The  motion  picture  as  an  advertising  medium  has  not  yet 
come  into  its  own.     The  use  of  cards  and  other  forms  of  inter- 

6.  If ofton- ruption  of  the  regular  "shows"  offer  probably  the 
picture    least  satisfactory  field  for  the  employment  of  this 

Advertinng  medium,  and  yet  it  is  about  the  only  field  which  has  so 
far  been  developed  to  any  extent.  A  number  of  manufacturers, 
among  them  the  Studebaker  Manufacturing  Company,  however, 
are  said  to  have  secured  remarkably  good  results  from  the  mo- 
tion-picture demonstrations.  The  Studebakers,  for  example, 
made  such  demonstrations  in  this  country  and  in  England,  illus- 
trating to  agents,  dealers,  and  prospective  car  buyers  the  meth- 
ods of  building  and  testing  Studebaker  cars. 

The  unique  plan  of  advertising  employed  last  spring  by  the 
Gossard  Corset  Company  suggests  a  new  line  of  development 
which  has  large  possibilities.  This  plan,  in  brief,  consisted  of  a 
motion-picture  play,  an  important  feature  of  which  was  a  series 
of  scenes  illustrating  corset  fittings.  This  was  put  on  at  local 
motion-picture  theatres  under  the  joint  auspices  of  the  Gossard 
Corset  Company  and  the  local  store  handling  their  line.  Tickets 
were  given  to  the  women  patrons  of  these  stores  and  the  "show" 
was  conducted  at  a  time  of  day  when  the  largest  possible  number 
of  women  would  be  at  liberty  to  attend.* 

The  possibiUties  of  these  and  other  uses  of  this  new  medium 
give  interest  and  value  to  the  following  discussion  of  the  present- 
day  organization  of  the  industry.  Walt  Bloeser,  Manager  of  the 
Motion  Picture  Advertising  Division  of  the  Chicago  Tribune, 

^Printers'  Ink,  December  24,  1914.  p.  ««. 


delivered  at  the  Chicago  Convention  of  the  Advertising  Clubs  of 
the  World  the  following  address  under  the  title,  "The  Motion 
Picture  Industry  and  Its  Advertising  Possibilities."  Mr. 
Bloeser's  article  is  prepared  primarily  to  interest  newspaper 
men  in  the  possibilities  of  securing  advertising  from  the  motion- 
picture  concerns,  but  it  has  much  general  interest  also: 

*The  motion-picture  industry  might  be  split  into  three  great 
divisions — three  monster  organizations,  which  grind  out 
263,000,000  feet  of  film  yearly,  realizing  therefrom  a  revenue 
greater  than  is  returned  to  the  steel  interests.  They  are  the 
General  Film  Company,  the  Universal  Film  Company,  and  the 
Mutual  Film  Company,  named  in  the  order  of  their  strength  and 
standing  in  the  motion-picture  world. 

Briefly,  the  history  of  the  motion  picture  dates  back  about 
eighteen  years.  Motion  pictures  were  invented  by  Thomas 
Edison  in  the  year  1872,  but  never  came  into  general  use  in  a 
commercial  manner  until  about  eight  years  ago.  It  is  necessary 
for  me  to  go  into  this  brief  history,  so  that  you  may  follow  some 
of  the  facts  that  I  will  quote  in  another  jmrt  of  this  paper,  which 
if  taken  singly  would  look  wholly  unreasonable,  but,  on  the  other 
hand,  will  look  very  plausible  when  you  have  some  idea  of  the 
fundamental  principles  on  which  this  business  operates. 

The  General  Film  Company  is  an  association  of  manufacturers 
whose  products  have  been  licensed  under  certain  patent  rights, 
and  are  owned  and  controlled  by  what  is  called  the  Motion 
Picture  Patents  Company,  otherwise  referred  to  as  the  "Hcensed 
group  of  manufacturers,"  of  which  Selig,  Edison,  Essanay,  and 
others  are  a  part.  The  members  of  the  Motion  Picture  Patents 
Company  are  the  producers  of  film  and  the  General  Film  Com- 
pany are  the  releasers  of  these  films.  The  Greneral  Film  Com- 
pany has  forty-seven  oflSces  in  the  United  States  and  Canada. 
It  owns  and  ojjerates  them  at  its  own  expense.  The  licensed 
group  of  manufacturers  contribute  a  certain  number  of  films 
each  week  to  the  Greneral  Film  Company,  which  in  turn  makes 
up  out  of  these  contributions  a  general  program  to  which  60 
per  cent,  of  the  exhibitors  subscribe.  The  various  licensed 
manufacturers  are  paid  in  accordance  with  the  number  of  prints 
they  contribute  to  the  General  Film  Company.     (By  the  way, 

^Printers'  Ink,  June  24,  1915.  p.  61. 


41« 


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413 


when  I  refer  to  a  print,  I  mean  a  copy  from  the  original  negative. 
The  negative  is  retained  by  the  manufacturer  from  which  as 
many  prints  can  be  made  as  he  desires.) 

The  Universal  Film  Company  is  a  combination  of  manufac- 
turers who  are  not  considered  as  licensed;  that  is,  they  are  not 
supposed  to  use  the  same  patented  instruments  that  are  used  by 
the  licensed  exhibitors.  At  the  present  time  there  is  a  certain 
amount  of  litigation  going  on  between  them  and  the  General 
Film  Company,  which  considers  them  infringers.  The  Univer- 
sal Film  Company  has  thirty-five  offices  in  the  United  States 
and  Canada.  The  Universal  differs  from  the  General  in  liiat 
most  of  the  manufacturers  included  in  its  group  own  and  operate 
their  own  exchanges,  whereas  in  the  General  Film  Company 
none  of  its  group  own  or  operate  them. 

The  Mutual  Film  Company,  which  has  thirty-five  offices,  like 
the  Universal  Company,  is  a  group  of  manufacturers  operating 
under  the  brand  of  Mutual  Pictures,  and  is  regarded  very  much 
in  the  same  light  as  the  Universal  Film  Company,  as  far  as  the 
idea  of  being  licensed  is  concerned.  The  stock  in  the  various 
companies  making  up  the  Mutual  is  largely  owned  by  the 
public  and  is  customarily  sold  by  bond  houses  and  on  the  curb 
market. 

These  three  that  I  have  just  described  are  practically  the 
mainstay  of  the  motion-picture  business.     In  addition  to  them 
are  many  independent  concerns  who  deal  in  features. 
If^^-  Hardly  a  day  passes  but  what  one  of  this  type  does  not 
entCon-   spnng  up  and  at  the  same  time  another  dies.     We 
cents     might  call  these  the  Independent  Companies,  the 
more  stable  ones  being  the  Paramount  Company,  the 
Metro  Company,  and  others.    We  might  again  divide  this  inde- 
pendent group  into  two  branches,  one  which  I  have  just  de- 
scribed, and  the  other.  Serial  Feature  Companies  such  as  are 
exploited    by    newspapers.    Keeping    these    facts    clearly    in 
your  mind,  you  have  some   idea  of  the  foundation  of  the 
motion-picture  business  and  how  it  is  classified  at  the  present 
date. 

What  most  interests  us  is,  what  bearing  does  all  of  this  have 
on  the  newspaper  business,  and  how  can  the  newspapers  benefit 
by  motion  pictures  and  accumulate  revenue  from  the  motion- 
picture  manufacturers?  I  regret  to  say  that  a  newspaper's 
opportunity  for  securing  advertising  from  the  Ucensed  companies 
is  not  great;  in  fact,  there  is  little  opportunity,  and  for  this 


reason:  An  exchange,  in  order  to  make  money,  must  be  run  at  a 
minimum  of  expense.  Volume  of  purchases  does  not  make  for 
a  volume  of  sales.  This  is  contrary  to  the  rules  of  modern  mer- 
chandising, but  it  is  not  surprising  because  in  the  show  business 
not  one  of  the  principles  of  successful  commercial  enterprising 
applies  to  successful  motion-picture  enterprising.  I,  for  instance, 
am  a  manufacturer  of  the  licensed  group.  I  contribute,  we  will 
say,  seven  prints  a  week  to  the  General  Film  Company.  The 
General  Film  Company  releases  these  on  a  certain  date  to  the 
exhibitors.  Reversing  the  process,  the  exhibitor  makes  his 
demand  for  pictures  upon  the  exchange  at  least  30  days  in  ad- 
vance. The  exchange  in  turn  makes  the  demand  upon  me,  as  a 
licensed  manufacturer,  almost  120  days  in  advance,  in  order  to 
give  me  ample  time  in  which  to  make  the  pictures.  Conse- 
quently this  makes  me  a  manufacturer  with  orders  filled  and 
waiting,  so  why  should  I  advertise  to-day  a  film  that  I  have  had 
a  full  order  on  120  days  ago.'^  If  I  did  I  would  only  be  making  a 
greater  number  of  prints  and  would  therefore  incur  a  greater 
expense  in  the  manufacturing  and  a  still  greater  expense  in  the 
handling,  and  have  less  profit,  because,  as  I  mentioned  before, 
an  exchange  must  be  run  at  a  minimum  of  expense  or,  as  you 
might  say,  a  minimum  of  purchases. 

Another  great  disadvantage  of  the  business  is  the  fact  that  the 
sales  price  is  determined  not  by  the  quality  or  the  merit  of  a  film 

or  picture,  but  by  the  age  of  the  film.  In  order  that 
Film^Deter-^^^  may  form  a  clear  comparison  in  your  mind  that 
viines  Price  ^iU  illustrate  this  point,  think  of  the  Uneeda  Biscuit. 

This  is  a  nationally  advertised  product,  comes  in  a 
package,  and  is  sold  for  five  cents.  It  is  five  cents  this  minute, 
to-day,  to-morrow,  the  next  day  and  forevermore.  Like  many 
nationally  advertised  products,  it  is  the  same  Uneeda  Biscuit 
in  quality  to-day,  to-morrow,  and  ever  after,  but  in  the  film 
busmess  you  have  a  feature  to-day,  something  else  to-morrow, 
and  still  something  different  the  next  day.  For  example:  At 
my  theatre,  I  show  a  picture  called  "A  Fool  There  Was."  The 
picture  is  known  as  a  first-run  because  I  show  it  first.  I,  we 
will  say,  run  it  to-night.  The  other  fellow,  a  few  blocks  away 
or  at  some  distant  part  of  the  city,  runs  it  to-morrow  night.  It 
then  becomes  a  second-run.  The  fellow  who  shows  it  the  next 
night  makes  it  a  third-run,  and  so  on,  the  film  becoming  older 
each  day.  Mind  you,  it  simply  becomes  older  each  day  it  moves 
farther  from  its  original  release  date.     (The  actual  wear  and  tear 


i 

ri 


414 


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^1 


f 


of  a  film  IS  a  minor  factor,  most  copies  of  film  enduring  about  six 
months,  at  the  end  of  which  time  they  can  be  replaced  at  a  cost 
of  from  4J  to  10  cents  per  lineal  foot.)     First-run  prices  for  big 
features  usually  start  at  $100  and  go  downward.     First-run 
prices  on  serial  pictures,  that  is  pictures  divided  into,  we  will  say. 
twenty  episodes,  start  at  about  $^5  and  go  downward.     The 
reason  for  this  is  because  a  picture  is  not  a  product  like  a  biscuit, 
but  IS  stamped  by  the  exhibitor  as  new  or  old  according  to  the 
date  on  which  it  is  released,  and  the  price  is  arranged  and  fixed 
accordingly.    This  does  not  always  apply  to  big  features  like 
Cabiria    and    Quo  Vadis."    These  pictures  usually  run  at  the 
large  theatres  in  business  districts  more  than  one  night,  some- 
times playing  from  one  week  to  one  year,  just  as  does  a  legitimate 
dramatic  show.     In  this  case  it  is  well  to  advertise  a  picture  be- 
cause you  can  get  the  accumulative  effect  of  advertising,  whereas 
you  cannot  get  the  same  effect  if  you  show  a  picture  to-night  and 
replace  it  for  another  picture  on  the  following  evening.     There- 
in lies  the  great  possibility  for  a  newspaper  to  secure  adver- 
tising,  and   this   necessarily   must  come   from   the  exhibitor 
showing  the  play,  a  phase  of  the  business  which  I  will  explain 
later. 

It  is  a  sad  fact,  but  true,  that  the  general  program,  i.  p.,  the 
programs  made  up  of  the  contributions  of  the  firms  in  the 
General,  Universal,  and  Mutual  Film  Companies,  cannot  be 
advertised  successfully,  as  they  are  the  only  dependable  staple 
that  these  motion-picture  concerns  have. 

In  a  few  words,  then,  let  me  give  you  a  resume  of  the  facts 
just  quoted.  1.  Motion-picture  concerns  like  the  licensed  pro- 
ducers do  not  have  to  advertise,  because  their  sales  are  made  be- 
fore their  product.  2.  The  feature  companies  which  I  have 
treated  briefly  should  advertise,  and  will  in  the  future  advertise, 
because  their  products  are  shown  under  more  favorable  circum- 
stances for  advertising.  It  is  to  this  end  that  the  newspapers 
^ould  encourage  the  independents  to  the  use  of  their  columns. 
That  newspaper  advertising  has  been  successful  for  them  is 
proved  every  day,  not  alone  in  the  Tnhunes  own  pictures,  but 
with  other  newspapers  throughout  the  country. 

Among  the  most  enterprising  and  aggressive  large  groups  are 
the  Universal  Company  and  the  Mutual  Company,  the  former 
spending  to  my  knowledge  about  $200,000,000  yearly  in  news- 
paper pubUcity,  and  the  latter,  through  their  various  groups, 
about  the  same  amount. 


ADVERTISING  MEDIUMS 


415 


In  social  life  everywhere  the  query  goes  back  and  forth,  "Will 

the  movies  some  day  replace  the  legitimate  theatre.'^"    Show- 

.    men,  experienced  and  keen  of  vision — long-bearded 

^^^^j^*  Thespians,  steeped  in  and  wedded  to  the  art  of  the 

Theatres  stage — ^producers  of  drama,  comedy,  etc.,  all,  are 
looking  with  grave  concern  toward  this  new  industry 
and  marvelling  at  its  phenomenal  growth.  Personally,  I  am  of 
the  opinion  that  the  legitimate  drama  will  never  die.  Acting 
"in  the  flesh"  will  always  be  popular  with  even  the  rabid 
movie  fan,  if  for  no  other  reason  than  as  a  contrast  to  pictures. 
What  will  take  place  is  an  elimination  of  the  trashy  stuff 
that  makes  up  a  large  part  of  our  modern  speaking  stage. 
Such  a  result,  I  am  sure,  will  be  welcomed  by  those  who 
are  directly  and  heavily  involved,  financially,  in  theatrical  enter- 
prises. 

Despite  the  opinions  of  some  showmen  of  the  legitimate  or 
speaking  drama  who  cling  with  jealous  pride  to  their  art,  the 
movies  as  amusement  material  have  proved  to  be  a  veiy  present 
help  to  all  and  will  therefore  live  and  grow.  The  fact  that  they 
are  making  tremendous  inroads  into  the  revenue  of  legitimate 
producers,  which  is  represented  in  the  astounding  figures  that 
$275,000,000  is  being  spent  annually  by  patrons  of  movie  thea- 
tres, indicates  that  nothing  except  a  nation-wide  holocaust 
could  check  its  growth.  Some  "bred-in-the  bone"  theatrical 
men  voice  their  sentiments  by  saying  that  the  movies'  entry  into 
the  amusement  field  is  merely  a  hard  times'  development,  that 
it  is  simply  a  fad  bom  in  order  to  die  again,  that  it  is  something 
of  an  experimental  venture  which  may  vanish  with  the  present 
business  depression. 

All  of  this  is  well  said,  but  we  cannot  overlook  the  sane,  sound, 
and  modern  economic  principle  on  which  the  business  is  bound  to 
thrive.  It  is  primarily  an  amusement  for  the  masses  and  classes 
— it  is  convenient  insofar  as  it  is  a  neighborhood  proposition — it 
supplies  everything  that  the  art  of  the  stage  does  with  the  ex- 
ception of  the  voice,  and  this  part  lacking  is  very  generously 
offset  by  the  vast  scope  of  original  and  natural  effects  possible  in 
making  naotion  pictures;  features  that  are  peculiarlj'^  its  own. 
Motion  pictures,  besides  being  a  form  of  amusement,  have  gained 
recognition  in  the  courts,  schools,  technical  colleges,  and  art 
studios,  by  doctors,  lawyers,  judges,  business  men,  and  people 
in  every  walk  of  life. 

It  is  needless  for  me  to  dwell  on  the  news  value  of  a  photoplay 


I 


410 


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department  in  a  newspaper.     Publishers  should  devote  a  sectiog 
of  their  paper  to  movie  news  in  which  current  films 

mN^s'  ^^  reviewed  and  gossip  of  the  fans  is  given  free  and 

Maierial  ^^  play.  News  and  movies  are  strikingly  analogous 
to  one  another.  The  printed  word  and  the  visualized 
thought  are  as  one,  and  compel  an  equal  amount  of  attention 
from  the  reader  whether  the  publication  is  a  morning  or  evening 
daily,  with  or  without  Sunday  issues.  Movie  news  is  on  a  par 
with  baseball  news,  with  the  added  advantage  that  it  is  an  all- 
the-year-round  feature.  It  serves  the  advertiser  by  increasing 
the  publication's  attraction  value  and  has  the  lasting  influence 
of  an  editorial  page.  The  modern  daily  is  hardly  complete 
without  its  movie  section,  and  has  much  to  offer  its  advertisers 
when  it  serves  a  large  movie  clientele. 

Publishers  should  give  some  very  serious  thought  to  the  as- 
tounding decline  of  amusement  advertising,  and  will  find  the 
institution  of  so-called  movie  directories  a  splendid  counterbal- 
ance for  the  loss  in  regular  amusement  hneage. 

In  order  to  establish  a  movie  directory  it  is  necessary  to  meet 
the  requirements  of  the  neighborhood  theatre.  These  require- 
ments consist  in  serving  a  new  type  of  advertiser,  a  special  rate,  a 
new  method  of  maintaining  credits,  a  copy  service,  and  sufficient 
publicity  to  educate  your  public  to  the  habU  of  reading  your 
columns  for  program  information. 

Taking  each  of  the  aforementioned  classifications  separately 
and  treating  each  briefly  in  the  order  of  its  mention,  the  following 
will  be  of  interest:  The  mome  exhibitor  might  be  divided  into 
three  classes:  first,  showmen  of  the  Marcus  Loew  type,  who 
conduct  their  chain  of  theatres  on  a  large  scale  and  in  a  business- 
like manner;  second,  circus  men,  theatrical  offcasts,  and  plain 
everyday  money-grabbers,  who  forsake  everything  for  the 
pleasing  of  increasing  the  cash  till,  and  third,  business  men,  who 
venture  into  the  game,  having  become  intoxicated  with  the  for- 
tunes made  by  others  in  the  movie  business. 

This  is  not  altogether  an  immodest  statement.  I  have  seen 
the  shrewdest  and  hardiest  products  of  our  money-laden  Wall 
Street — men  of  brains  and  ability,  credited  with  huge  success  in 
the  merchandising  world — and  theatrical  men  with  bulging 
bankrolls  (who  should  have  known  better)  plunged  headlong 
into  this  movie  mire  and  led  with  bankroll  and  reputation  to  the 
abattoir  and  slaughtered  like  so  many  helpless  lambs.  Each 
class  has  a  personality  that  must  be  studied  and  handled,  and 


ADVERTISING  MEDIUMS 


417 


the  greatest  play  for  business  made  on  the  exhibitor's  vanity 
pure  and  simple  if  you  hoj>e  to  secure  lineage  for  the  present, 
along  the  lines  of  least  resistance. 

A  theatre  in  order  to  run  at  a  profit  must  have  from  three 
hundred  seats  upward  and  charge  ten  cents  admission.  Results 
from  advertising  are  manifested  not  in  increased  patronage,  not 
in  all  the  other  benefits  advertising  gives,  but  in  the  indirect 
result  that  an  added  service  gives  to  the  exhibitor's  patrons. 
In  the  final  analysis,  an  exhibitor  does  not  have  to  advertise  to 
get  business  these  days.  Advertising  from  his  viewpoint  is  like 
serving  ice  water  to  his  patrons,  and  will  not  be  a  necessary  part 
of  his  business  until  the  public  gets  the  habit  and  relies  on  it. 
Fortunately,  the  task  of  getting  the  reading  public — the  motion- 
picture-going  masses — into  the  habit  of  reading  the  newspapers 
for  programs  of  motion  pictures  is  allotted  to  the  newspapers 
alone. 

A  raie  must  be  determined  on  the  lowest  possible  basis  so  that 
an  exhibitor  can  afford  to  advertise  his  business  at  a  cost  not  to 
exceed  the  price  he  ordinarily  pays  for  printed  heralds. 
Bevek)  ^the  ^^^^S  ^  ^^^  business  and  one  in  which  the  proprie- 
Adveriising  ^^rs  of  theatres  change  hands  to  the  extent  of  20 
per  cent,  every  three  months,  all  bills  should  be  pay- 
able at  the  end  of  seven  days,  and  secured  cash  in  advance 
wherever  possible.  The  typical  showman  cannot  appreciate  the 
value  of  long  credits,  being  accustomed  to  doing  a  cash  business 
himself  and  preferring  not  to  keep  unwieldy  ledgers,  journals,  or 
books  of  any  sort.  His  is  the  province  of  the  loose  jitney,  the 
easy  come,  the  easy  go,  and  publishers  must  get  in  line  "while 
the  coming  is  good." 

A  regular  daily  copy  service  must  be  given  the  exhibitor,  he 
relying  almost  entirely  on  the  integrity  of  the  publishers'  ad- 
vertising staff  to  take  care  of  such  details  as  pleasing  set-up  of 
ads,  appropriate  wordings,  phrases  with  punch,  etc.,  etc. 

Such  a  feature,  being  news  to  the  reading  pubUc,  must  receive 
encouragement  through  the  newspaper's  own  columns,  must 
tend  in  every  particular  to  stimulate  the  habit  of  seeking  the 
directory  column  for  program  information. 

Such  a  directory  in  a  city  the  size  of  Chicago  should  bring 
publishers  from  100,000  to  150,000  lines  of  space  annually.  The 
business  is  substantial,  the  money  good,  and  the  proposition, 
besides  having  exceptional  news  value,  is  a  very  lucrative  form 
of  advertising. 


418 


ADVERTISING  MEDIUMS 


'4 


As  a  circulation  builder,  the  serial  motion  picture  reigns  su- 
preme. It  fetches  a  class  of  reader  who  at  least  has  five  and  ten 
cents  a  day  to  spend  for  amusements,  who  is  educated  sufficiently 
to  appreciate  in  his  or  her  way  the  pictures  that  are  shown  to-day. 
a  reader  who  has  ambition,  whims,  motives,  and  desires,  and 
withal  a  reader  whom  any  publisher  can  consider  an  asset  to 
offer  the  average  advertiser.  It  gets  the  men,  women,  and 
children,  rich  and  poor,  foreign  and  American  born,  including 
every  law-abiding  citizen  in  the  community,  and  delightfully 
eliminates  the  riff-raff  who  menace  our  pubUc  and  who  don't 
patronize  the  advertiser  because  they  can  get  it  just  as  easy  by 
steaUng  or  begging. 

«.      A    CONSIDERATION    OF    SOME    DISPUTED    MEDIUM    QUESTIONS 

These  are  a  number  of  questions  about  mediums  wliich  are 
perennial  in  advertising  circles.  But  many  of  these  seem  to  be 
gradually  working  toward  a  satisfactory  settlement.  A  separate 
chapter  will  be  devoted  to  progress  in  the  solution  of  circulation 
problems,  since  these  constitute  not  only  one  of  the  most  impor- 
tant groups,  but  the  group  in  which  progress  is  being  made  inost 
rapidly.  Some  of  the  others  are  reserved  for  consideration  in 
this  chapter. 

The  following  paragraphs  are  taken  from  an  address  before  the 
Six  Poiftt  League  in  New  York  on  March  12th  by  George  Frank 
Lord,  Advertising  Manager  of  the  Du  Pont  Powder  Company. 
In  the  course  of  this  address  Mr.  Lord  gave  the  newspaper  repre- 
sentatives a  very  plain  statement  of  what  he  as  an  advertising 
manager  thought  of  some  of  the  soUciting  practices  employed  in 
attempting  to  sell  space: 

♦Now  as  to  this  question  of  service.  It  is  quite  apparent  that 
all  the  various  interests  connected  with  advertising  are  coming  to 
a  reaUzation  of  the  mutuality  of  interest  of  the  advertiser,  the 
pubUsher,  and  the  pubhc.  The  proposed  advertising  campaign 
of  the  Association  of  National  Advertisers  has  for  its  object 
nothing  more  nor  less  than  preaching  the  aforementioned  mu- 

*Pnnters  Ink,  March  18,  1915.  p.  37. 


ADVERTISING  MEDIUMS 


419 


tuality  of  interest  and  thereby  convincing  the  public  that  they 
ought  to  buy  advertised  articles  for  their  own  protection  and 

advantage.  .      „       ,      , 

I  believe  that  there  is  a  great  opportunity  for  development 
work  in  newspaper  advertising,  but  to  approach  it,  newspaper 
advertising  managers  and  representatives  must  co-operate,  and 
they  must  study  the  field  of  sales  for  commodities  in  general 
rather  than  the  bank  accounts  of  advertisers. 

It  is  perfectly  obvious  that  the  newspapers  as  a  whole  and 
united  represent  the  greatest  publicity  force  in  this  country,  but 
they  are  not  getting  the  advantage  of  this  power,  for  the  simple 
reason  that  they  do  not  unite  nor  use  it  as  a  whole.  Such  united 
work  as  is  done  by  the  newspapers  is  planned  for  them,  and 
their  co-operation  secured  by  some  outside  party,  and  the  fact 
that  such  movements  are  successful  and  benefit  the  adver- 
tiser, the  publisher,  and  the  public  clearly  proves  that  such  or- 
ganizations as  this  or  the  American  Newspaper  Publishers'  As- 
sociation, or  any  other  organization  representing  publishers  as  a 
whole,  could  well  afford  to  establish  a  promotion  department 
for  the  development  of  newspaper  advertising  and  sales  cam- 
paigns. 

Not  the  least  important  part  of  the  work  of  such  a  department 
would  be  to  broaden  the  attitude  of  newspapers  themselves 
toward  national  advertising,  and  to  stop  the  petty  competition 
that  destroys  the  united  action  necessary  for  the  success  of  such 
promotive  work.  Such  a  department  would  have  to  be  free 
from  all  bias  as  to  individual  papers,  and  it  must  have  the 
complete  confidence  and  support  of  every  pubUsher  represented 
therein.  Consider  the  possibiUties  of  such  a  department  for 
quickly  gathering  data  necessary  for  planning  a  national  cam- 
paign. Consider  the  power  of  a  department  able  to  offer  an 
advertiser  the  united  local  co-operation  of  newspapers  in  100 
important  centres.  Consider  the  possibilities  of  intelligent  co- 
operation with  an  advertiser  on  the  part  of  a  nation-wide  asso- 
ciation of  newspapers.  Such  a  central  organization  could 
readily  decide  what  was  proper  and  legitimate  co-operation  and 
what  was  not. 

In  closing  I  wish  to  state  it  is  my  conclusion  that  newspaper 
advertising  for  national  advertisers  offers  the  greatest  develop- 
ment opportunity  of  any  factor  in  modern  advertising,  and  that 
the  newspaper  publishers  of  this  country  are  losing  miUions  of 
dollars  annually  by  their  failure  to  organize  their  efforts  to  cut 


ill 

n 


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421 


.1 


out  lost  motion  and  to  reduce  to  a  science  the  problem  of  market- 
ing goods  through  newspapers. 

An  equally  frank  unburdening  of  the  mind  was  that  indulged 
in  by  S.  Wilbur  Connan  of  N.  W.  Ayer  &  Son  in  an  address 
delivered  to  the  Southern  Newspaper  Publishers*  Association 
at  Grove  Park  Inn  at  Asheville,  N.  C,  on  June  14,  1915,  in  the 
course  of  which  he  undertook  to  tell  the  newspaper  men  how 
some  of  their  methods  were  regarded  by  the  advertising  agents: 

*The  first  plank  of  my  platform  is  that  newspapers  constitute 
the  greatest  form  of  advertising  media;  the  second  plank  is  that 
you  newspaper  pubHshers  have  a  gold  mine  that  you  don*t  know 
how  to  work,  and  that,  as  far  as  national  advertising  is  con- 
cerned, it  is  being  accomplised  without  your  aid  in  proper  degree, 
because  you  Heralds  of  Modernity  are  the  most  behind-the- 
times  men  in  appreciation  of  your  own  opportunities  and  your 
own  values  that  the  business  world  can  exhibit. 

Most  of  you  will  readily  admit  the  correctness  of  my  first 
plank,  so  1*11  put  that  aside  for  later  consideration  and  take  up 
plank  number  two,  with  some  attention  to  detail. 

Basically,  newspaper  men  do  not  believe  in  advertising.  With 
rare  exceptions,  the  advertising  agency  and  the  publisher  are  the 
poorest  advertisers  in  America.  A  newspaper  man  had  rather 
do  anything  else  than  spend  some  real  money  (all  of  which  he 
has  earned  from  adverting)  for  some  advertising  for  himself. 
If  he  ever  does  get  his  courage  screwed  up  to  the  point  of  print- 
ing an  ad  in  his  own  paper  (where  it  costs  him  absolutely  nothing, 
and  generally  earns  him  a  reward  proportionate  to  its  cost),  the 
ad  is  usually  the  poorest  example  of  advertising  in  the  paper — 
poorly  written  and  poorly  arranged  typographically — a  bunch 
of  brag  and  bluff  and  bluster  of  a  sort  that  would  send  any  busi- 
ness house  into  bankruptcy  if  it  adopted  publicity  of  a  similar 

*The  newspaper  publisher  with. his  stock  of  merchandise 
(which  is  white  space  for  the  advertisers  of  this  nation  to  utilize 
to  their  high  advantage)  does  not,  broadly  speaking,  fix  his 
prices,  terms,  and  conditions  with  any  scientific  regard  for  to-day 
or  to-morrow,  but  with  almost  slavish  fidelity  does  he  face  the 

^Prinieri  Ink  June  24,  1915,  p.  41. 


past  and  ask,  "How  have  these  things  always  been  done  and 
what  do  my  fellow-publishers  do?  *' 

The  whole  newspaper  rate  question  needs  disinfecting,  fumi- 
gating, and  deodorizing.     You  will  gather  from  my  remarks 
Conce*^rw  that  I  consider  it  to  be  in  a  bad  state  of  decay.     A 
from  the   similar  price  to  all  customers  under  like  conditions 
Paper  to  is  generally  regarded  as  simple  business  honesty,  and 
Advertisers  y^^  ^.j^^  newspaper  which,  under  any  circumstances  or 
conditions,  will  not  in  any  manner,  shape,  or  form  make  any 
rebates,  discounts,  or  concessions  of  any  kind  or  character,  is  a 
rara  avis. 

How  many  of  you  will  not,  for  my  house,  give  a  free  insertion 
or  a  reading  notice  or  concession  of  some  kind?  Do  you  answer 
me  that  my  house  should  not  ask  for  such  things,  fight  for  them, 
demand  them,  yes,  almost  force  them?  Well,  I  reply  that  if  we 
did  not  do  so  we  should  soon  be  badly  in  need  of  customers,  be- 
cause if  we  do  not  get  these  things  for  our  chents  some  other 
agent  will;  and  as  long  as  advertisers  want  such  things  and 
newspapers  grant  them,  we,  as  an  agent,  must  ask  for  them 
and  contend  for  them  as  a  simple  matter  of  primary  self-protec- 
tion. 

We  never  know  what  day  we  will  lose  a  good  account  because 
we  have  tried  to  be  fair  and  decent,  and  some  less  scrupulous 
agent  has  cooked  up  a  plan  whereby,  with  the  connivance  of  a 
lot  of  weak-kneed  newspaper  publishers,  he  has  assured  our 
client  of  that  ghttering  bauble  desired  by  so  many  advertisers — 
"something  for  nothing." 

Dilly-dallying  with  newspapers  for  concessions  of  various 
kinds  costs  us  time  and  money,  and  earns  no  commissions. 
You  gentlemen,  I  think,  have  no  adequate  appreciation  of  all 
the  annoying  angles  of  this  proposition  from  the  viewpoint  of  an 
advertising  house  which  is  devoting  its  entire  time  and  talent 
to  the  creation  and  development  of  advertising,  and  yet  is  sub- 
ject to  the  constant  competition  of  other  agents  keen  and  skil- 
ful in  the  manipulation  of  newspaper  rates  and  rules. 

I  recently  failed  in  the  solicitation  of  an  automobile  tire  ac- 
count, and  the  president  of  the  company  told  me  privately  that 
he  had  been  promised  by  the  successful  agent  a  definite  number 
of  inches  of  free  reading  matter  for  every  column  of  paid  space 
he  used  in  his  newspaper  list.  I  had  refused  to  promise  any- 
thing but  the  best  service  my  house  could  give  him  for  every 
dollar  he  spent  with  us. 


n 


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ADVERTISING  MEDIUMS 


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423 


■I 


All  the  associations  you  can  organize  won't  stop  this  sort  of 
thing.  Get  together  and  resolute  until  you  are  black  in  the  face, 
and  you  won't  stop  it. 

We  do  not  ask  the  Curtis  Publishing  Company  for  conces- 
sions, because  we  know  we  will  not  get  them,  and  because  we 
know  no  other  agent  will  get  them.  This  is  true,  not  because 
Cyrus  Curtis  belongs  to  the  Periodical  PubHshers'  Association, 
but  because  he  is  Cyrus  Curtis— able,  independent,  and  square. 
VVe  may  not  agree  with  him  on  some  points,  but  we  know  just 
where  he  stands,  and  when  we  tell  a  client  what  we  can  do  for 
him  in  the  Saturday  Evening  Post,  or  the  Indies*  Home  Journal, 
or  the  Country  Gentleman,  we  waste  no  time  in  wondering  if  some 
other  agent  can  promise  or  deliver  more.     .     .     . 

Let's  look  at  another  phase  of  the  newspaper  rate  situation 
that  IS  very  discouraging  to  the  national  advertiser.  Even 
assuming  that  rates  are  fully  maintained,  there  is  to  my  mind 
a  gross  injustice  done  under  the  present  system  of  rate  making. 
No  one  shall  surpass  me  in  my  admiration  of  the  modern  de- 
partment stores  as  a  great  merchandise  distributing  machine, 
and  as  a  community  convenience  of  high  order;  but  its  cost  to 
the  community  it  serves,  and  particularly  the  newspapers  of 
the  community,  should  also  be  taken  into  consideration. 

That  the  big  buyers  should  have  the  best  price  is  a  very  well- 
estabhshed  principle  in  many  lines  of  business,  but  in  some  other 
The  '*In'  ^^^  ^*  ^^  ^^^olutely  unsound,  uneconomic,  and  hurtful. 
tide  Rati"  T^^  ^^S  customer  of  N.  W.  Ayer  &  Son  gets  his  adver- 
tising advice  and  service  at  no  lower  rate  of  commission 
than  the  advertiser  of  small  size.     The  big  user  of  advertising 
space  in  many  of  our  highest  class  periodicals  pays  exactly  the 
sanie  rate  per  line,  per  inch,  or  per  page  that  is  charged  the  most 
modest  advertiser  in  the  pubHcation. 

^^  Department  stores  themselves  are  great  advocates  of  the 
'  one-pnce-to-all"  theory,  and  in  many  first-class  stores  you 
or  I  would  pay  the  same  price  per  yard  for  one  or  a  hundred 
yards  of  lace— the  same  price  each  for  one  of  a  half-dozen 
neckties. 

I  am  advocating  no  impractical,  Utopian  ideals,  and  I  do  not 
mean  to  offer  the  suggestion  that  conditions  are  ripe  for  such  a 
revolutionary  move,  but  it  is  very  clear  in  my  mind  that  the 
flat-rate  prmciple  is  right,  and  that  newspapers  are  great  suf- 
ferers because  so  many  mediums  of  general  circulation  are  prov- 
mg  it  to  be  right. 


Under  a  flat  rate  the  little  fellow  has  a  square  deal.  Be- 
ginners in  advertising,  hke  beginners  in  anything  else,  are  apt  to 

R     /?/     ®^^^  small.     Protection  and  help  for  the  beginner  are 
ofTflat  ^^^  desirable.     Advertising  badly  needs  the  begin- 
Rate      ner.     The  death  rate  is  alarmingly  high,  so  let's  keep 
up  the  birth  rate.     .     .     . 

You  use  the  amomit  of  department-store  advertising  that 
your  paper  carries  as  a  big  argument  in  soliciting  business  from 
me,  but  because  a  department  store  used  your  paper  at  five 
cents  a  line  is  no  reason  why  my  client,  with  possibly  only  a 
partial  distribution  in  your  town,  can  use  it  at  five  times  as  much, 
which  is  probably  the  rate  he  will  have  to  pay  for  the  amount  of 
space  he  can  use. 

Now  here  is  another  point.  Possibly  my  client  sells  his  goods 
tlirough  drygoods  or  men's  furnishing  or  hardware  or  drug 
stores,  and  the  department  stores,  and  the  department  stores 
handle  such  goods  as  he  produces.  Department  stores  are 
notoriously  difficult  to  induce  to  stock  a  branded  and  adver- 
tised line,  but  having  taken  it  on,  one  of  their  pleasant  practices 
is  to  cut  the  price  to  smithereens,  and  by  advertising  it  in  your 
papers  at  the  damty  Httle  private  rate  extended  to  them,  disgust 
other  merchants  with  the  line  and  ruin  the  market  for  my  cHent. 

Under  present  rulings  a  manufacturer  may  not,  by  contract 
or  agreement,  fix  the  price  at  which  his  wares  shall  be  offered 
to  the  consumer.  Suppose  you  owned  a  trademark  name  on  a 
valuable  line  of  silks,  and  had  spent  a  half  million  dollars  in  ad- 
vertising it  until  the  consumer  of  such  goods  knew  it  and  re- 
spected it.  Suppose  that  department  stores  here  and  there, 
recognizing  that  your  goods  were  standard,  cut  the  price  in  half 
for  tlieir  own  glorification,  and  to  attract  customers  to  buy  other 
things  on  which  they  make  a  good  healthy  profit.  Suppose  de- 
partment stores  advertised  their  cut  prices  on  your  goods  widely 
in  the  newspapers  of  their  towns  (paying  for  such  advertising 
about  one  fifth  or  one  sixth  the  rate  that  you  would  have  to  pay 
for  the  amount  of  space  you  could  afford  to  use) .  Suppose  some 
newspaper  man  came  to  solicit  your  advertising,  and  used  as 
his  chief  argument  the  amount  of  department-store  advertising 
his  paper  was  carrying.  What  would  you  have  to  say?  Your 
answer  to  him  is  my  answer  to  you,  when  you  inquire  why  the 
newspapers  do  not  get  more  foreign  business. 

Short  rates,  foolishly  extravagant  discounts  for  space,  local 
rate  arrangements  to  meet  the  requirements  of  some  one  store 


424 


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'it, 

i 


K 


M 


or  class  of  stores — all  these  things  must  pass  away  before  the 
correctness  of  the  flat-rate  principle — if  not  now,  eventually. 

Some  attention  must  be  given  to  the  actuahties  of  the  require- 
ments of  national  advertisers  if  the  newspapers  want  the  busi- 
ness of  national  advertisers.  I,  for  one,  do  not  think  you  will 
have  to  lower  rates,  but  an  evening  process  must  come  about; 
gross  inequahties  must  be  ironed  out;  some  must  pay  more, 
others  less;  the  peaks  must  be  trimmed  down  and  the  valleys 
filled  in.    You  can  make  money  by  bringing  about  the  change. 

As  far  as  drygoods  lines  are  concerned — in  our  100  largest 
cities  five  stores  in  each  city  do  over  75  per  cent,  of  the  business; 
in  the  2,500  next  largest  cities  three  stores  in  each  city  do  over 
85  per  cent,  of  the  business;  in  the  same  2,500  cities  one  store 
alone  does  40  per  cent,  of  the  business;  in  1,200  small  cities  one 
store  does  over  50  per  cent,  of  the  business. 

In  most  American  cities  most  newspapers  are  "stymied"  by 
the  department  store,  and  the  wise  pubUsher  will  do  well  to  face 
the  facts  and  think  of  the  future. 

If  I  were  soliciting  advertising  for  a  newspaper  from  the  general 

agencies  of  this  country,  or  from  the  national  advertisers  direct. 

Practical  ^  ^°^^  ^^^  bragging  about  the  amount  of  space  some 

Co-opera-  department  stores  used  with  me,  and  tell  how  many 

tion  News-  hardware  stores  or  drug  stores  or  grocery  stores  there 

pop<Tf    were  in  my  town.    I  would  be  prepared  to  tell  what 

^rn^h    ^^^  ^^  merchants  they  were;  what  branded  lines  of 

goods  they  carried.     I  would  equip  myself  to  talk 

about  the  people  of  my  community;  what  kind  of  homes  they 

had;  their  employment;  their  standard  of  intelligence;  their 

scale  of  earnings. 

Advertising  is  shifting  and  changing  very  rapidly.  No  worth- 
while agent  talks  much  about  the  gHttering  generalities  of  ad- 
vertising nowadays.  The  best  advertising  man  is  neither  a 
literary  genius  nor  a  spellbinding  solicitor.  He  is  a  student  of  the 
flow  of  merchandise.  He  is  investigating  the  purchasing  habits 
of  stores  and  consumers. 

The  making  of  a  modern  advertising  plan  involves  a  study  of 
distributive  methods  and  channels  and  a  proper  understanding 
of  trade  relations  or  lack  of  them.  Advertising  is  now  generally 
considered  as  an  item  of  sales  cost,  and  may  only  be  made  fully 
eflFective  through  intelligent  retail  co-operation,  sales  efficiency 
of  roadmen,  and  numerous  other  contributing  factors.  Even 
when  publications  of  national  circulation  are  exclusively  em- 


425 


ployed  in  an  advertising  campaign,  very  exhaustive  charts  of 
their  circulation  in  various  communities  or  districts  are  compiled 
as  a  basis  of  operation,  and  newspapers  are  far  behind  their 
opportunities  in  the  extension  of  the  sort  of  co-operation  that  is 
practical  and  helpful. 

Newspapers  will  not  develop  their  foreign  business  by  oppos- 
ing other  forms  of  advertising.  They  are  natural  aids  to  periodi- 
cal publications,  and  periodical  publications  can  greatly  im- 
prove the  resultfulness  of  a  newspaper  campaign. 

Quit  knocking  the  magazines.  The  most  successful  periodi- 
cal publisher  in  America  answers  that  sort  of  thing  by  spending 
a  few  hundred  thousand  dollars  per  year  advertising  in  your 
newspapers  and  building  his  own  splendid  subscription  lists 
larger  and  larger,  and  his  prestige  with  business  men  stronger 
and  stronger — making  his  wonderful  publications  more  and 
more  essential  to  the  general  advertiser  and  making  it  con- 
stantly less  essential  for  such  advertisers  to  use  your  papers  to 
cover  the  country. 

Running  a  newspaper  is  a  simon-pure  business  proposition, 
like  running  a  laundry,  or  a  coal  mine,  or  a  shoe-shining  parlor, 
or  a  street-railway  system.  Business  in  any  line  succeeds  in 
almost  direct  ratio  to  the  efficiency  with  which  it  understands 
and  meets  the  requirements  of  its  customers. 

The  biggest  asset  that  any  newspaper  can  have  is  the  confi- 
dence of  its  primary  customers — that  is,  the  readers.  Next,  it 
must  consider  the  claims  of  its  secondary  customers — ^that  is, 
the  advertisers.  If  it  wants  the  national  advertiser  it  must  pay 
some  attention  to  his  needs,  his  difficulties,  his  rights. 

There  probably  isn't  a  man  within  the  range  of  my  voice  who 
couldn't  take  my  place  and  tell  as  many  wrong  things  about  the 
advertising-agency  system  as  I  have  pointed  out  concerning  the 
newspapers.  I  will  save  him  the  trouble,  however,  by  admitting 
them  in  advance.  The  main  difference  is  that  you  make  the 
agent  by  your  recognition  of  him,  while,  on  the  other  hand,  if 
your  paper  is  right  and  deserves  to  win,  I  do  not  beUeve  that 
any  agent  or  combination  of  agents  can  whip  you. 

Every  one  knows  there  are  far  too  many  advertising  agents — 
newspapers,  magazines,  and  the  agents  themselves  all  admit  it. 
The  business  premises  of  half  the  advertising  agencies  in  this 
country  aren't  physically  large  enough  for  a  real  file-room  of  the 
leading  newspapers,  but  take  it  by  and  large,  "any  one  who  can 
get  an  account  can  get  a  commission." 


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This  simply  results  in  most  agencies  devoting  their  time  to 
taking  accounts  from  others  instead  of  creating  new  business 
You  transfer  the  account  from  one  agency  to  another  on  your 
books,  but  your  revenue  isn't  increased. 

Newspaper  recognition  should  be  a  highly  prized  franchise. 

It  should  be  impossible  of  obtainance  except  on  a  basis  of  dem- 

RccognUim  onstratcd  ability  to  create  and  develop  new  adveHising 

of  Agents  accounts  and  unquestionable  financial  responsibility. 

wT^      There  are  not  above  a  score  or  so  of  agents  with 

whom  you  are  doing  busmess  who  could  pay  their 

bills  to-morrow  if  theu-  leading  client  were  to  fail,  but  this  great 

business  of  newspaper  publishing  takes  no  heed  of  that  fact 

And  so  I  say  again,  as  I  said  at  the  outset,  that  what  the  news- 
paper busmess  needs  is  business  principles  in  its  conduct  and 
management— a  reahgnment  of  rates,  rules,  and  regulations  to 
the  reqmrements  of  this  present  hour. 

Now  I  haven't  forgotten,  even  if  you  have,  that  there  are  two 
pJanks  to  my  platform,  and  that  one  of  them  is  a  pleasant  plank 
1  made  the  statement  that  the  newspaper  is  tlie  foremost 
form  of  advertising  media,  and  I  mean  every  word  of  it.     Many 
of  the  greatest  national  advertising  campaigns  had  their  start 
m  the  newspapers  of  one  city  or  one  state  or  one  section.     As 
production,  capacity,  and  distributive  abihty  grew,  the  zone  of 
advertising  widened  until  the  country  over  was  covered,  and 
national  publications  could  be  used  with  maximum  resultf  ulness. 
1  he  house  that  I  have  the  pleasure  of  representing  does  a  very 
lar^  business  with  the  newspapers,  and  is  successfuUy  con- 
ducting many  sectional  campaigns.     I  believe  we  will  see  more 
national  advertising  in  newspapers,  simply  because  all  logic  and 
all  sanity  and  aU  experience  are  behind  the  newspaper  as  the 
Ideal  advertising  medium  for  everything,  from  the  five-cent 
soda-cracker  to  the  five-thousand-doUar  automobile,  and  be- 
cause I  believe  that  the  newspapers  are  beginning  to  commence 
to  start  to  see  the  national  advertisers  side  of  the  case. 

The  American  newspaper  owes  its  strength  to  its  local  suffi- 
ciency.    It  IS  the  palladium  of  local  interests.     It  is  the  re- 
Tke  News-  Sector  of  local  sentiment.     It  is  the  stimulator  of 
paper's     local  enterprise.     It  is  the  booster  of  local  talent.    It 
^^^    is  the  recorder  of  local  endeavor.      It  is  the  reporter 
of  local  accomplishment.     It  is  the  herald  of  local  ambition. 
All  these  things  it  is,  should  be,  and  will  continue  to  be. 
But  a  spirit  of  nationahsm  is  in  the  eir.    Men  are  thinking 


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with  a  national  mind.  What  the  nation  eats,  wears,  does,  and 
feels  is  reflected  in  Decatur,  Ala.;  Decatur,  111.,  and  Decatur, 
Texas. 

If  a  man  produces  an  excellent  breakfast  food  in  Battle  Creek, 
IVIich.,  and  educates  a  nation  of  men  and  women  to  demand  it, 
and  a  nation  of  storekeepers  to  supply  the  demand,  the  attitude 
of  the  New  Orleans  newspapers  toward  it  should  be  that  they 
will  advertise  it  for  him  at  a  fair  rate,  compared  with  what 
they  would  charge  one  of  their  big  stores  if  it  should  bring  out  a 
breakfast  food  under  its  own  brand — they  should  help  him  get 
it  into  stores  in  their  town — ^they  should  give  all  the  local  aid 
and  help  they  can  to  those  employed  by  the  advertiser  in  open- 
ing and  developing  the  New  Orleans  market.  Incidentally, 
the  papers  of  Battle  Creek  ought  to  do  just  as  much  for  some 
gentleman  of  the  Crescent  City  who  works  up  enough  courage 
to  put  a  first-class  package  rice  on  the  market  when  he  reaches 
their  town  with  his  campaign. 

Who  cares  where  goods  are  made?  The  average  man  doesn't 
know  or  care  if  Printe  Albert  Smoking  Tobacco  is  made  in  West- 
field,  N.  Y.,  or  if  Welch's  Grape  Juice  is  bottled  in  Winston- 
Salem,  N.  C.  The  newspapers  are  getting  the  advertising  of 
both  products  because  they  have  been  nationalized,  and  inten- 
sified selling  means  local  application  of  the  forces  of  publicity. 

Don't  be  afraid  of  national  advertising  mediums.  Love  them 
for  the  good  they  have  done.  The  very  best  national  periodi- 
cals are  only  sublimated  newspapers,  anyway.  They  are  fast 
developing  news  features  and  approaching  newspaper  standards. 
The  greatest  advertising  mediums  are  getting  away  from  the 
purely  fiction  idea  and  are  approximating  great  national,  weekly, 
or  monthly  newspapers.  They  are  doing  infrequently,  in  a 
national  way,  just  what  you  can  do  frequently  in  a  local  way. 
You  fit  together  in  a  national  advertising  campaign  like  peas  in 
apod. 

Why  this  question  of  newspapers  or  magazines?  What  rea- 
sons under  the  sun  are  there,  except  your  own  self -erected  bar- 
riers, why  newspapers  should  not  have  more  and  more  national 
advertising? 

We  have  seen  a  lot  of  thinly  spread  out,  so-called  national  ad- 
vertising campaigns,  designed  solely  with  the  idea  of  bluffing  the 
dealers  into  stockmg  the  goods,  but  this  is  only  just  one  Uttle 
picture  in  the  ever-shifting,  fast-moving  kaleidoscope  of  adver- 
tising experimentation. 


r. 


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Advertising  fundamentals  are  safe.  Advertising  principals 
are  certain.     ... 

One  other  point  of  dispute  which  is  constantly  causing  friction 
is  the  question  of  flat  rates  for  space.  Lafayette  Young,  Jr.,  of 
the  Des  Moines  Capital  discussed  this  question  quite  freely  and 
suggested  a  way  out  in  an  address  which  he  delivered  before 
the  Newspaper  Conference  of  the  Associated  Advertising  Clubs 
of  the  World  on  June  22, 1915 : 

♦Newspapers  are  anxious  to  secure  more  advertising,  and  I 
am  assuming  for  my  hypothesis  that  the  complexity  of  the  news- 
paper rate-card  operates  as  a  serious  handicap  for  handlmg  the 
present  volume  of  general  advertising  and  militates  against 
an  increase  of  volume.  I  wish  to  support  this  argument,  not 
by  views  or  theories,  but  by  facts  furnished  by  advertisers  and 
advertising  agents  with  whom  newspapers  do  business. 

Herbert  Gunnison,  of  the  Brooklyn  Eagle^  expresses  the  situa- 
tion when  he  says,  "There  is  nothing  so  unbusinesslike  as  most 
of  the  rate-card  methods  of  newspapers.'' 

Collectively  the  newspaper  cards  contain  too  many  different 
rates  and  too  many  discounts.  They  are  lacking  in  uniform- 
ity and  simphcity.  They  are  lacking  in  intelligibility.  They 
are  pubhshed  in  all  shapes  and  sizes  from  a  single  sheet  to  as 
much  as  twelve  pages.  There  is  no  sequence  to  the  informa- 
tion given  and  there  is  no  rule  as  to  the  amount  or  character 
of  the  information.  They  are  almost  impossible  of  interpre- 
tation by  laymen,  and  they  are  extremely  difficult  for  the  ex- 
pert. I  examined  one  hundred  rate-cards  of  metropolitan 
newspapers  for  the  purpose  of  this  discussion  and  I  found 
m  the  ^gregate  thirty  special  rates  in  addition  to  innumer- 
able variations  of  these  same  rates.  Special  rates  are  made 
by  newspapers  for  insurance  statements,  schools,  and  colleges, 
hotels  and  summer  resorts,  for  diflFerent  pages,  automobiles, 
pohtical  advertising,  new  publications,  steamships,  books  and 
periodicals,  mail-order  advertising,  farm  and  garden  maga- 
zines, railroads,  financial  advertising,  motorcycles,  excursions 
educational  advertising,  transients,  beer,  whiskey,  and  liquor 
advertising,  doctors,  motor-boats,  art  sales,  lake  steamers,  poul- 

*PnnUri  Ink,  June  M,  1915.  p.  73. 


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try,  advertising  on  woman's  page,  government  ads,  sanitariums, 
travel,  and  special  rates  for  special  days. 

Under  the  circumstances,  what  should  be  done  for  improve- 
ment and  simplification?  I  have  communicated  with  a  very 
large  number  of  agents  and  with  more  than  a  hundred  important 
newspapers  in  America,  and  with  a  large  number  of  general 
advertisers.  My  conclusion,  derived  from  the  information 
received  from  these  sources,  is  that  the  flat  rate  is  the  ideal  rate 
and  should  be  adopted  or  approximated  by  every  newspaper 
that  wishes  to  do  business  in  the  most  efficient  manner. 

The  buying  and  selling  of  newspaper  advertising  is  difficult 
because  there  are  so  many  newspapers.  S.  C.  Stewart,  of  the 
Stewart-Davis  Advertising  Agency,  of  Chicago,  scores  a  point 
when  he  says  that  all  publishers  should  concede  individual  prej- 
udices and  opinions  for  the  benefit  of  the  whole  business. 

What  evidence  have  I  to  prove  that  advertising  agencies  pre- 
fer the  flat  rate  ?  I  received  replies  from  35  important  advertising 
agents.  Only  one  agent  was  bitterly  against  the  flat 
Ad^^l  rate.  Five  of  them  were  in  favor  of  a  graduated 
Flat  Rale  scale.  Twenty-nine  of  them  were  unqualifiedly  in  fa- 
vor of  the  flat  rate,  and  all  of  them  thought  the  average 
card  was  open  to  improvement  and  especially  approved  of  efforts 
at  simplicity  and  uniformity.  Here  is  what  some  of  the  agents 
who  favored  the  flat  rate  had  to  say: 

Lord  &  Thomas:  "We  are  recommending  the  flat  rate  and 
believe  the  time  will  come  when  the  majority  of  the  publishers 
will  have  just  one  rate."' 

Frank  Presbrey  Agency:  "It  is  our  opinion  that  the  flat  rate 
is  the  ideal  rate-card,  and  trust  the  time  may  soon  arrive  when  all 
of  the  newspaper  publishers  may  realize  this.  In  all  our  ex- 
perience we  have  yet  to  find  a  case  where  the  newspaper  lost 
any  business  on  account  of  the  flat  rate." 

The  Brackett-Parker  Company,  Boston:  "This  agency  is  un- 
hesitatingly in  favor  of  the  flat  rate,  with  the  privilege  of  posi- 
tion at  a  price,  and  it  would  be  the  greatest  step  possible  to 
make  in  the  direction  of  honesty  if  the  newspapers  would  all 
come  to  this  arrangement  and  adhere  to  it." 

Roberts  &  Mac  Avinche,  of  Chicago:  "We  have  advocated 
the  flat  rate  for  thirty  years.  We  are  buying  one  thing  in  a 
newspaper  and  that  is  circulation.  If  the  circulation  is  worth 
six  cents  a  line,  it  is  worth  six  cents  per  line  whether  we  use  one 
line  or  twenty  thousand  lines." 


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431 


Stack  Advenising  Agency,  Chicago:  "It  is  our  opinion  that 
more  and  more  publishers  are  coming  to  the  conclusion  that  the 
flat  rate  is  the  most  satisfactory  basis  on  which  to  sell  advertis- 
ing space.  The  short  rate  is  a  bad  proposition  from  every 
standpoint,  and  we  beheve  the  day  is  coming  when  all  pub- 
lishers will  recognize  that  every  advertiser  should  be  placed  on 
the  same  basis,  thus  giving  the  small  advertiser  an  opportunity 
to  expand  his  advertising  expenditures.** 

Wrigley  Advertising  Agency,  Chicago:  "It  is  our  experience 
that  the  short  rate  is  emphatically  a  nuisance  and  the  flat  rate 
is  by  all  odds  the  better  system  from  the  standpoint  of  the  news- 
paper, the  agency,  and  the  advertiser.'* 

Hugh  Brennan,  of  the  Dooley-Brennan  Agency,  who  for 
many  years  handled  the  rates  for  the  Stanley  Clague  Agency, 

Papers  ^^  *^^  following  to  say :  "  I  think  the  flat  rate  on  news- 
wUhFlat  papers  is  the  ideal  arrangement.  There  never  has 
Rate  Get  been  within  my  personal  experience  during  the  past 
the  Pref'  twelve  years  any  case  where  a  publisher  failed  to  se- 

erence  ^^^  ^j^^  £^j|  Uj^g^ge  on  account  of  a  contemplated 
appropriation  simply  because  of  a  flat  rate.  I  do  not  remember 
of  having  an  argument  with  an  advertiser  regarding  a  flat-rate 
paper  on  account  of  rate,  provided  the  paper  was  all  right. 
But  I  do  remember  a  number  of  arguments  about  using  a  paper 
that  had  a  sliding  scale.  I  think  it  is  safe  to  say  where  there  is  a 
selection  to  be  made  in  a  city  on  two  papers,  one  with  a 
sliding  scale  and  one  with  a  flat  rate,  both  about  equal  in 
circulation,  that  the  flat-rate  paper  would  get  the  preference 
every  time." 

Mallory,  Mitchell  &  Faust,  Chicago:  "Your  letter  of  May 
19th  has  gone  the  rounds  of  the  members  of  this  firm  and  the 
order  department,  and  the  consensus  of  opinion  is  that  from  our 
standpoint  the  only  rate  for  a  newspaper,  and,  in  fact,  for  any 
publication,  is  a  flat  rate.  We  must  feel  that  the  newspaper  is 
absolutely  independent  before  we  make  any  contract  that  car- 
ries with  it  any  possibiUty  of  getting  stuck  with  short  rates 
later  on." 

Charles  H.  Touzalin  Agency:  "We  are  surely  enthusiastic 
for  the  flat-rate  card  as  the  ideal  rate-card.  The  short  rate  is 
certainly  a  nuisance." 

Blackman-Ross  Company,  New  York  City:  "I  do  not  believe 
there  is  any  doubt  in  the  minds  of  the  agents  that  a  flat  rate 
for  everj'  newspaper  would  tickle  us  all  to  death.    But,  while 


we  should  all  be  working  for  the  flat  rate  let  us  have  a  uniform, 
simplified  rate-card  in  the  meantime.** 

Morse  Advertising  Agency,  Detroit,  Mich.:  "We  also  be- 
lieve that  putting  all  publications  on  a  flat-rate  basis  would  be 
an  advantage,  thus  disposing  for  all  time  of  the  short-rate  bug- 
bear. There  are  lots  of  arguments  in  favor  of  the  sliding  rates, 
we  admit,  but  we  believe  the  advantages  of  flat  rates  would 
greatly  outweigh  everything  else.*' 

Campbell-Ewald  Company,  Detroit,  Mich.:  "Your  first 
question,  *Is  the  flat  rate  an  ideal  card.?*'  can  most  em- 
phatically be  answered  *Yes.'  On  the  face  of  it,  the  news- 
papers should  favor  flat  rates  and  I  am  sure  that  the  agencies 
of  the  country  would  welcome  such  a  change." 

Street  &  Finney  Agency,  New  York:  "The  writer's  personal 
opinion  is  the  flat  rate  is  the  most  equitable  card.  The  short 
rate  is  decidedly  an  annoyance,  and  very  often  the  cause  of 
trouble  between  the  agent  and  his  client.  There  are  many 
things  that  enter  into  a  space  contract,  which,  if  not  fulfilled, 
cannot  always  be  clearly  explained  to  the  publisher.  He  can 
see  no  reason  to  waive  a  short-rate  charge,  as  it  is  equal  to  cut- 
ting his  rate,  even  though  the  circumstances  are  entirely  justi- 
fiable. The  flat  rate  would  eliminate  all  such  trouble,  and  place 
all  advertisers  on  an  equal  basis,  both  large  and  small." 

Dauchy  &  Company,  New  York:  "I  think  you  will  find  that 
the  flat-rate  papers  are  getting  larger  volumes  of  business  than 
those  that  have  a  sliding  scale.** 

Richard  A.  Foley,  Philadelphia:  "The  flat  rate  is  very  indis- 
pensable in  a  great  many  cases  as  it  simplifies  matters  consider- 
ably and,  as  you  know,  short  rates  are  always  rather  annoying.** 

I  could  continue  to  quote  indefinitely  from  advertising  agents. 
I  think  the  evidence  that  I  have  given  is  suiEcient  to  show  the 
preference  of  advertising  agents  generally. 

Let  us  see  what  some  of  the  leading  advertisers  have  to  say: 

Julius  Kayser  &  Company:  "The  universal  adoption  of  the 
AdveHisers'^^^  ^*?  ^^  *^^  abolition  of  the  short  rate  are  the 

Viewa     ^^^^  wished-for  things  from  the  point  of  view  of  the 
buyer  of  advertising  space.** 
^^  Joseph  Campbell  Company,  Camden,  N.  J.,  by  L.  M.  Frailey: 
I  am  in  favor  of  a  flat  rate,  but  only  on  the  basis  of  this  flat 
rate  applying  to  both  foreign  and  local  advertisers.'* 

W.  B.  Morris,  Northwestern  Knitting  Company:  "My  idea  is 
that  the  sooner  the  flat  rate  is  adopted  by  all  newspapers  the 


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ADVERTISING  MEDIUMS 


easier  it  will  be  for  newspapers  to  get  hold  of  the  national  ad- 
vertising that  is  now  appearing  in  other  mediums." 

General  Roofing  Company:  "We  strictly  desire  to  use  the 
paper  offering  us  flat  rates  because  we  are  siu'e  that  flat  rates 
are  in  line  with  up-to-date  business." 

What  as  to  those  newspapers  that  are  operating  under  the 
flat  rate? 

Exverunce  ^'  ^-  «^ohnson,  business  manager  of  the  Indianap- 
qf  Pavers  olis  News,  says:  "We  have  a  flat  rate  of  12  cents  a 
Thai  Have  line.     We  put  in  a  flat  rate  about  four  years  ago  and 

Tried  It  gj^^j  j^  most  satisfactory.  Before  we  went  to  a  flat 
rate  I  wrote  to  practically  all  the  agencies  in  the  country  and 
practically  every  one  favored  it." 

Every  publisher  should  study  the  card  of  the  Indianapolis 
News.  It  is  simphcity  itself.  It  is  a  model  that  should  be  used 
by  every  newspaper.  With  respect  to  general  advertising  it 
says:  "Display  advertising  12  cents  a  line  flat;  no  reduction  for 
regular  insertions  or  total  amount  of  space  used.  No  special 
or  class  rates  of  any  kind."  I  do  not  believe  that  there  is  a 
newspaper  man  in  America  who  could  dispute  the  efficiency  of 
such  simplicity  or  who  would  doubt  that  the  Indianapolis  News 
is  of  such  size  and  character  as  to  test  the  value  of  the  one-rate 
system. 

The  Philadelphia  Bulletin  is  another  eminent  newspaper  with 
a  flat  rate.  Its  card  is  subject  to  equal  commendation  with  that 
of  the  Indianapolis  News.  The  Philadelphia  Bulletin  writes 
concerning  their  card:  "The  Bulletin  has  a  flat  rate  of  35  cents 
per  line,  run  of  paper;  45  cents  per  line  for  full  position,  and  our 
experience  is  that  the  advertising  agent  and  advertisers  prefer 
the  flat  rate." 

The  Buffalo  News  says  that  "the  best  evidence  as  to  what  we 
think  of  the  flat  rate  can  be  determined  from  the  fact  that  we 
propose  to  put  the  flat-rate  card  into  effect  July,  1916." 

The  Boston  Globe  writes:  "Our  rate  is  flat,  both  for  local  and 
foreign  business." 

The  Denver  Post  writes:  "There  should  be  a  flat  rate  and  ab- 
solutely the  same  rate  to  everybody.  We  have  flat  rates  on 
both  the  Denver  Post  and  the  Kansas  City  Post." 

The  Milwaukee  Journal  writes:  "The  flat  rate  simpUfies  the 
accounting,  makes  it  impossible  to  make  mistakes  in  biUing,  and 
is  so  superior  to  all  other  forms  of  cards  that  we  would  not  go 
back  to  this  form  under  any  circumstances." 


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433 


The  Washington  Star  says:  "In  the  foreign  field  we  operate 
entirely  upon  a  flat  rate." 

The  Providence  Journal  states:  "We  have  employed  the  flat 
rate  covering  both  the  local  and  foreign  field  since  October,  1913, 
and  could  not  be  persuaded  under  any  circumstances  to  revert 
to  our  former  cards.  Most  newspapers  to-day  are  handicapping 
themselves  in  a  fashion  which  is  hardly  short  of  criminal  with 
rate-cards  which  repel  the  advertiser,  give  rise  to  mutual  sus- 
picion and  controversy,  and  bristle  with  inconsistencies  of  such 
ancient  origin  that  the  publisher  himself  cannot  offer  a  satisfac- 
tory explanation." 

The  Chattanooga  Times:  "We  have  had  a  flat  rate  on  this 
newspaper  for  several  years,  and  find  that  it  works  satisfactorily 
alike  to  both  us  and  the  advertiser.  I  think  the  flat  rate  is 
virtually  saying  to  the  advertiser  that  this  newspaper  does  not 
need  a  contract." 

The  Omaha  Bee:  "We  have  a  flat  rate.  This  applies  to  all 
advertising,  both  local  and  foreign.  From  the  standpoint  of  the 
advertiser  we  believe  that  the  flat  rate  is  the  most  satisfactory 
and  the  most  equitable." 

If  every  newspaper  in  America  had  cards  as  easy  to  under- 
stand, as  easy  to  handle  as  those  of  the  Philadelphia  Bulletin, 
the  Indianapohs  News,  and  the  Washington  Star,  thousands 
of  dollars  of  advertising  now  going  to  other  mediums  would  go 
to  newspapers,  and  thousands  of  dollars  would  be  saved  in  the 
bookkeeping  and  correspondence  by  agencies  and  pubHshers 
alike.  S.  C.  Stewart  says:  "The  flat  rate  simplifies  the  arith- 
metic of  advertising  and  saves  time  and  money  for  the  publisher, 
the  agent,  and  the  advertiser."  The  waste  of  time  due  to  the 
present  newspaper  rate-card  is  beyond  reckoning. 

What  is  the  situation  in  the  magazine  field?  The  magazines, 
with  scarcely  an  exception,  operate  upon  a  flat  rate.    The 

Marked  ^^lurday  Evening  Post,  the  Ladies*  Home  Journal,  and 
Success  of  niost  of  the  standard  magazines  have  a  flat  rate. 
Magazines  Successful  Farming,  the  Philadelphia  Farm  Journal, 

FUd^Rai  *°^  ™^^^  ^^  *^^  ^^^°^  papers  are  each  upon  a  flat-rate 
basis.  Is  there  any  argument  that  could  be  advanced 
against  the  flat  rate  for  newspapers  that  could  not  with  equal 
cogency  [be  advanced  against  magazines,  and  has  it  not  always 
been  apparent  that  agents  find  it  much  more  satisfactory  to  do 
business  with  magazines  than  with  newspapers? 
The  objections  to  the  flat  rate  that  were  advanced  in  letters 


134 


ADVERTISING  MEDIUMS 


ADVERTISING  MEDIUMS 


435 


•J 


that  I  received  from  newspapers  were  based  upon  two  things. 
First,  that  it  would  be  inequitable  on  the  part  of  the  publisher 
not  to  recognize  the  wholesale  rate  to  the  advertiser  who  buys 
in  large  quantities;  second,  a  fear  on  the  part  of  the  publishers 
that  they  would  lose  business  by  changing  from  the  sliding  scale 
to  the  flat  rate.  The  first  presumption  that  the  sliding  scale 
should  be  used  on  account  of  its  equity  does  credit  to  the  news- 
paper publisher's  fairness.  Yet  the  man  with  whom  the  pub- 
lisher does  business,  the  advertiser  and  the  agent,  prefer  the  flat 
rate.  The  publisher  generously  offers  the  advertiser  something 
that  he  does  not  want.  Advertisers  do  not  want  the  sliding 
scale  with  its  bugbear,  the  short  rate,  attached.  They  know 
that  the  short  rate  leads  to  trickery  on  the  part  of  both  publisher 
and  advertising  agents.  One  prominent  advertising  agent  in 
Chicago  told  the  writer  that  as  a  matter  of  competition  they  were 
compelled  to  make  10,000-line  contracts  when  they  had  no  in- 
tention of  using  that  amount  of  space,  knowing  full  well  that  the 
newspaper  would  not  enfore  the  short  rate  against  them. 

But  what  of  the  loss  of  business  by  the  adoption  of  the  flat 
rate?  I  asked  this  specific  question  of  a  large  number  of  agents. 
Every  agency  was  certain  that  no  newspaper  would  lose  business 
by  the  adoption  of  the  flat  rate.  They  unanimously  stated  that 
flat-rate  papers  get  the  complete  schedules  and  most,  of  them 
agreed  that  the  flat-rate  papers  secured  the  preference.  Ap- 
parently there  is  no  ground  for  the  belief  on  the  part  of  publishers 
that  the  graduated  scale  should  be  extended  as  a  matter  of  justice 
or  that  the  adoption  of  the  flat  rate  would  lose  them  any  business. 

Personally,  I  am  thoroughly  convinced  that  the  adoption  of  a 
flat  rate  or  its  approximation,  the  simplification  of  the  rate-card. 
Urges  Papers  ^^^  .the  elimination  of  the  short-time  rate,  and  the 
to  Endorse    Special  rates,  would  be  beyond  price  to  the  publisher 
^R^tf^^^d     ^^^  ^^^  advertiser,  and  I  am  greatly  in  hopes  that  this 
■^"'■^     meeting  will  take  some  action,  endorsing  such  proce- 
dure and  urging  a  similar  action  upon  the  Bureau  of  Advertising 
of  the  Publishers'  Association.    The  whole  tendency  of  modern 
business  is  toward  an  elimination  of  waste.      It  is  a  problem  of 
simplicity  versus  complexity.     In  the  fire  insurance  business 
they  have  a  standard  fire  policy  and  a  bureau  for  the  establish- 
ment of  rates,  and  in  no  business  has  there  been  greater  diflSculties 
than  in  the  fire  insurance  business  to  get  onto  an  efficient  basis. 

The  newspaper  publishers  have  made  a  tremendous  advance 
with  the  circulation  problem  in  the  Audit  Bureau  of  Circulations. 


This  organization  takes  the  circulation  problem  out  of  the  field 
of  controversy  and  allows  advertisers  to  study  newspaper  charac- 
teristics and  newspaper  productivity  rather  than  devote  them- 
selves to  constant  circulation  investigations.  Now,  if  the  pub- 
lishers will  do  with  the  rate-card  what  they  have  done  with  the 
circulation  it  will  be  the  biggest  advance  that  has  been  made  in 
twenty-five  years  in  the  newspaper  publishing  business. 

In  correspondence  with  advertising  agencies  I  received  a  large 
number  of  suggestions  as  to  what  every  rate-card  should  contain. 
In  general,  every  pubhsher  knows  what  should  be  on  the  rate- 
card.  I  will  only  name  those  things  that  are  frequently  omitted, 
and  which  the  advertiser  and  the  advertising  agent  desire.  The 
agent  desires  that  the  card  should  contain  the  agency  commission 
and  cash  discount;  that  it  should  contain  circulation  figures;  that 
it  should  contain  data  concerning  the  field  in  which  the  pubHca- 
tion  circulates;  that  it  should  contain  the  date  on  which  the  card 
went  into  effect;  that  it  should  contain  the  name  of  the  pubHca- 
tion  in  full  and  the  price  at  which  it  sells  per  year  and  per  copy; 
information  as  to  whether  cuts  should  be  mounted  or  unmounted; 
it  should  contain  the  special  rates  in  logical  order;  information 
as  to  special  position  should  be  very  specific.  It  should  be  very 
plain  whether  the  publication  is  a  morning  or  evening  paper. 
Cards  should  be  issued  frequently  so  that  the  agent  is  sure  that 
the  card  is  up  to  date.  All  regulations  concerning  illustrations 
and  objectionable  advertising  should  be  mentioned.  One  of  the 
advertising  agencies  suggests  that  the  card  should  be  put  in 
loose-leaf  form  and  another  advertiser  insists  that  it  should  not 
be  on  cardboard,  as  he  says  there  are  a  number  of  agents  who 
paste  the  cards  in  books  rather  than  file  them.  Some  of  these 
suggestions  may  be  helpful  to  pubHshers  who  have  not  been 
giving  the  matter  recent  attention. 

Many  advertisers  and  advertising  agents  to  whom  I  have 
written  and  with  whom  I  have  conferred  have  made  complaint 
The  Inside  ^^ainst  newspapers  for  having  lower  rates  in  the  local 
Price  Eml  ^^^^  than  in  the  foreign  field,  and  this  difficulty  exists 
in  a  great  many  cities,  and  particularly  in  the  automo- 
bile and  department-store  field.     One  agent  writes  on  this  point 
saymg,  "When  the  advertising  agent  figures  with  a  wise  adver- 
tiser he  is  likely  to  find  that  the  advertiser  makes  a  comparison 
of  the  rate  he  can  secure  buying  over  the  department-store 
signature  as  against  buying  direct  through  the  agent.    There 
IS  no  question  but  what  the  department-store  rate  enables  the 


436 


ADVERTISING  MEDIUMS 


advertiser  to  save  some  money.  But  if  you  want  to  develop 
advertising  in  the  foreign  field  of  the  kind  that  is  most  naturally 
going  to  develop,  it  will  be  necessary  to  make  some  protection  of 
the  agent  on  this  particular  point.'* 

Another  agent  complains  about  allowing  the  commission  direct 
and  about  different  rates  in  the  local  and  foreign  field,  and  says: 
"One  annoying  thing  in  connection  with  our  business  with  news- 
papers is  caused  by  the  utterly  unfair  attitude  that  most  news- 
papers take  in  the  matter  of  allowing  agency  commission  to 
advertisers  direct.  Another  is  the  granting  of  local  rates, 
which  are  in  many  cases  much  lower  than  the  foreign  rates  on 
business  that  is  run  over  the  imprint  of  a  local  dealer." 

The  problems  of  the  inefficient  rate-card  lead  us  to  inquire  if 
there  is  a  business  in  the  world  in  which  there  are  so  many 
difficulties  to  be  corrected  as  those  existing  between  the  news- 
paper, the  advertising  agent,  and  the  advertiser.  And  this 
makes  me  hope  very  much  that  every  newspaper  pubhsher  will 
canvass  the  situation  with  respect  to  his  own  rate-card  and  his 
own  methods  of  doing  business  in  an  effort  to  make  improvement 
for  the  benefit  of  the  whole. 

I  am  certain  that  newspapers  can  get  more  advertising  by 
improving  their  selling  prices.  I  am  certain  that  newspapers 
per  se  deserve  more  advertising.  I  am  certain  that  the  rate- 
card  must  be  simplified  and  that  the  corollary  problems  affecting 
the  relationship  between  the  paper  and  the  advertiser  must  be 
solved.  Newspapers  must  do  their  part  to  make  it  easy  instead 
of  difficult  to  buy  space. 


CHAPTER  XI 

ADVANCE   IN   CIBCULATION   STANDARDS 

FOR  a  number  of  years  efforts  have  been  made  to  stand- 
ardize circulation  facts  and  figures.  For  a  long  time 
little  apparent  progress  was  made  beyond  developing 
the  idea  that  there  was  real  virtue  in  telling  the  truth  about 
circulation  when  the  truth  was  agreeable.  There  never  was  any 
trouble  about  knowing  what  circulation  standards  ought  to  be, 
but  it  was  difficult  to  get  enough  people  to  adopt  these  standards 
to  make  it  really  mean  anything  that  they  had  been  adopted. 

Bert  Moses,  of  the  Omega  Chemical  Company  of  New  York 
and  former  President  of  the  Association  of  American  Advertisers, 
delivered  an  address  before  the  Fourteenth  Annual  Meeting  of 
that  association  in  which  he  outlined  some  of  the  main  features 
of  the  system  of  circulation  reports  which  the  American  Associa- 
tion had  adopted.  In  the  course  of  this  address  Mr.  Moses  dis- 
cussed some  of  the  main  points  in  the  history  of  the  Association 
of  American  Advertisers  and  its  efforts  to  work  out  this  problem. 
To  this  work  a  large  part  of  recent  progress  owes  its  origin: 

*In  fifteen  years'  experience  it  has  been  found  that  the  only  way 
to  get  circulation  facts  is  to  open  up  the  books  and  count  the  figures. 

By  comparing  this  book  with  that,  by  consulting  cash  records, 
by  checking  up  white  paper  bills,  by  matching  mailing-lists  with 
correspondence,  and  other  methods  famiUar  to  competent  ac- 
countants, we  come  close  to  the  truth. 

If  there  is  any  better  method  than  the  one  we  have  arrived  at 
after  fifteen  years'  work,  we  surely  would  like  to  know  what  it  is. 

The  Association  of  American  Advertisers*  reports  are  wonder- 
fully comprehensive  and  supremely  simple. 

*Frinteri  Ink,  April  5,  1914,  p.  41. 

4S7 


I 


4d8 


CIRCULATION  STANDARDS 


1 


I  have  here  the  report  of  our  examiner  upon  a  great  daily  in 
a  great  city.  -^         ©  j  ^^ 

A  Sample  •    ^*  comprises  23  pages  and  gives  information  of  vital 
RejioH    importance  to  an  advertiser. 

It  tells  how  many  papers  are  sold—how  many  are 
months"^*^  °^  returned— average  press  run  and  circulation  by 

It  shows  whether  the  paper  is  going  ahead  or  going  back  by 
givnig  gams  or  losses  from  month  to  month.  ^ 

It  divides  the  circulation  up  into  city  and  country  distribution. 

It  gives  a  bnef  histoiy  of  the  paper. 

It  gives  ^e  subscription  price-the  typographical  appearance 
-the  quahty  of  the  paper  used-the  length  and  width  of  columns 
—the  average  number  of  pages  for  a  year-the  number  of  edi- 
^ons  issued  and  the  quantity  of  each  and  where  the  bulk  of  each 
edition  goes. 

It  indicates  what  the  general  policy  of  the  paper  is  and  what 
are  probably  the  sort  of  people  who  buy  and  read  it. 

It  teUs  all  about  methods  of  distribution,  and  if  there  are  com- 
binations or  special  deals  or  premium  schemes  used  those  par- 
ticulars are  set  down  also,  ^ 

J^Ku^Hi}'''^  collections  are  made  from  dealers,  and  it  tells 
whether  the  accounts  are  weU  paid  up  or  otherwise. 

It  tells  what  kmd  of  advertising  is  accepted  and  what  kind 
rejected  and  all  about  the  paper's  advertising  policy. 
^  K^gives  the  pohtics  of  the  paper  and  the  news  service  it  em- 

.    It  gives  the  names  of  those  of  our  members  who  are  using  space 
m  Its  columns.  &  f    ^ 

f ;i^^ '^  ^  w'""  ?u^^  ^^^^^  P*^^  ^^  fig^s  ^^^ P^ise  distribu- 
tion of  circulation  that  goes  outside  the  city. 

This  report  cost  our  members  about  75  cents,  while  the  adver- 
tising rate  of  the  paper  itself  is  40  cents  or  50  cents  a  Une. 

Ihus,  by  paying  out  the  price  of  two  lines  of  space,  we  get  all 
this  mformation  beforehand,  and  when  we  are  ready  to  make 
contracts  we  know  precisely  what  we  are  doing. 

We  do  not  pretend  to  do  anything  more  than  give  facts,  and 
facts  are  things  you  can  never  get  too  much  of. 

I  do  not  beheve  any  representative  of  this  paper  is  possessed 
of  half  as  much  knowledge  about  it  as  the  members  of  Sis  asso- 
ciation.    .    .    . 

We  are  not  satisfied  with  publishers'  statements  alone. 


CIRCULATION  STAJTOARDS  480 

We  do  not  believe  in  circulations  made  by  affidavit  any  more 
than  a  bank  will  accept  deposits  on  affidavit. 

We  want  to  count  the  papers,  just  as  a  bank  wants  to  count 
the  money  before  making  an  entry  in  the  pass-book. 

Delicate,  indeed,  is  the  work  we  are  trying  to  do. 

A  publisher  is  as  touchy  about  his  circulation  as  Boston  is 
touchy  about  her  syntax. 

The  difficulty  is  that  up  to  date  nobody  has  supplied  a  satis- 
factory definition  of  circulation  that  is  generally  accepted,  and  yet 
circulation  is  the  hole  into  which  the  advertiser  pours  his  money 

I  here  are  naore  ways  of  defining  the  word  than  there  are  poli- 
ticians m  Indiana.  ^ 

It  is  good  to  reaUze  that  the  work  we  have  done  is  coming  to 
be  recognized  as  a  real  service  to  the  honest  pubhsher 

More  and  more  publishers  are  showing  a  tendency  to  deal  from 
the  top  of  the  deck  and  play  fair. 

Audiurrs  u  ^^^^u''?^  ^^^^  ^^  ^"''  auditors  to  go  over  their 

Oiven  a    ^^^>  but  Urgently  seek  such  examinations. 

Welcome  As  a  matter  of  fact,  requests  for  examinations  are  so 
^  constantly  increasing  that  we  are  unable  to  comply  as 

quickly  as  we  wish  we  could. 

The  most  valuable  part  of  our  work,  however,  is  getting  infor- 
mation from  publishers,  who,  through  various  excuses,  endeavor 
to  cloud  the  issue.     ... 

The  opposition  we  had  to  overcome  emanated  from  two 

You  never  found  a  man  Kke  Victor  Lawson,  or  Cyrus  H.  K 
^^^'fl^f""^  ""i  \f''^^''  publishers,  like  those  of  the  Washington 
wZ:u     ^^^^^  ^'^^\  ^I'r  Indianapolis  News,  or  the  New  York 

w     ^^  ^  ^*°^^^  syUable  against  us. 
KvYn  Ji!^  savagely  attacked  by  a  pubhsher  in  the  South  and 
by  another  publisher  out  on  the  coast,  but  these  folks  were  hid- 
ihfv'T^    ^°^  ^^7  ^'"^'^  ^^'^^  ^«  *^  fi°^'  ^d  so,  like  inkfish, 

anJtrl^?'''''^'*  ^'''  ^^  ""^^y  ^y  ^^^"^^^g  ^^^^  surroundings 
and  tried  to  escape  m  the  noise  and  din  they  expected  to  foUow. 

We  have  been  attacked  by  discharged  employees,  but  you  may 

wa^fjf^'  ^^«^  ^^^  ^y  P^Pl^  ^  ^^om  you  have  p^d 
wages  after  you  find  you  need  them  no  longer. 


Ml 


440 


CIRCULATION  STANDARDS 


CIRCULATION  STANDiVRDS 


441 


)m 


m 


It  is  rather  a  sad  commentary  on  modern  progress  to  have 
to  say  that  not  one  advertiser  in  a  hundred  seems  to  care 
whether  the  circulation  figures  laid  before  him  are  authentic  or 

not. 

I  have  gone  to  Imndreds  of  these  misguided  gentlemen  and 
endeavored  to  get  them  to  join  us  in  our  work,  showing  as  best  I 
could  how  really  desirable  it  is  to  have  facts  in  advertising,  and 
the  answer  I  usually  got  was  that  our  work  was  not  extensive 
enough — that  we  didn't  have  enough  members  or  enough  money 
to  cover  the  country  as  we  should,  which  was  the  naked  truth, 
just  as  it  is  the  naked  truth  to  tell  a  hungry  man  that  what  he 
needs  is  food,  and  then  turn  on  your  heel  and  walk  away. 

Poverty  has  stared  us  in  the  countenance  practically  every  day 
since  we  started,  and  the  marvel  is  that  we  have  done  one  tenth 
the  work  that  we  have  actually  performed. 

ffanf  Every  dollar  has  been  stretched  to  the  utmost,  and 

surely  candidates  for  statues  when  the  time  comes  to 
perpetuate  in  bronze  or  marble  the  pioneers  who  set  things 
in  motion  for  honesty  in  advertising  when  advertising  was 
young.     ... 

Of  the  hundreds  of  reports  sent  out  by  the  A.  A.  A.  in  the 
last  fifteen  years,  I  have  every  reason  to  feel  and  almost  to  know 
that,  like  Ivory  Soap,  991%^  per  cent,  were  pure,  and  more 
than  likely  the  percentage  is  even  higher. 

Advertising  is  the  most  uncertain  and  the  most  expensive  in- 
stitution we  know  anything  about  unless  it  be  a  son  going  to 
college  or  a  gasoline  car. 

The  one  thing  about  advertising  that  it  is  possible  to  hog-tie 
and  to  hold  is  circulation. 

There  is  one  kind  of  circulation  that  is  valuable  and  another 
kind  which  has  very  little  value. 

The  only  kind  of  circulation  I  personally  care  very  much 

about  is  the  kind  that  comes  from  printing  a  good  paper  or  a 

good  magazine  which  people  buy  because  they  like  it. 

^'T'i^"      Of  what  value  is  circulation  secured  by  giving  away 

Valine     premiums  that  are  alleged  to  be  worth  more  than  the 

subscription  price — when  subscribers  subscribe  for  the 

premium  rather  than  for  the  publication? 

Of  what  value  is  circulation  largely  made  up  of  copies  pur- 
chased for  the  purpose  of  cutting  out  voting  coupons? 

Is  circulation  circulated  free  by  campaign  committees  of  an\ 


real  value  to  anybody  but  the  advertising  manager  and  pub- 
lisher? 

Of  what  value  is  bulk  circulation  created  by  aflSdavit,  and  bulk 
circulation  that  exists  only  in  the  imagination,  and  bulk  circula- 
tion secured  in  any  way  except  by  printing  a  good  paper? 

When  an  advertiser  buys  circulation  he  is  entitled  to  know 
what  he  is  going  to  get  in  the  way  of  quantity. 

That  is  so  self-evident  that  no  normal  man  will  dispute  it. 

And  the  only  way  to  know  is  to  set  an  accountant  at  work 
upon  the  books  and  the  records. 

But  how  was  the  circulation  secured? 

Where  do  the  papers  or  magazines  go? 

What  kind  of  people  comprise  the  readers? 

Now,  my  fellow  income-taxpayers  and  citizens  of  this  more  or 
less  free  land,  we  are  getting  close  to  the  theme. 

If  the  circulation  of  a  two-dollar  magazine  was  built  up  by 
giving  away  four  dollars'  worth  of  bum  dishes,  it  is  not  worth  so 
much  per  thousand  as  the  circulation  secured  by  hiring  good 
editors  and  good  writers. 

If  the  circulation  is  largely  made  up  of  people  whose  incomes 
are  limited,  it  is  not  the  kind  of  circidation  to  create  sales  for  a 
Packard  car. 

If  the  circulation  scatters  all  over  creation  and  then  back 
again,  it  is  not  good  circulation  for  the  advertiser  whose  product 
is  distributed  in  a  few  places  or  in  one  place  only. 

If,  for  instance,  I  use  a  paper  in  Chicago,  and  am  desirous  of 
reaching  Chicago  people  alone,  then  I  want  that  paper  which, 
other  things  being  equal,  reaches  the  most  Chicago  people. 

It  seems  foolish  for  me  to  stand  here  and  state  such  self-e\ddent 
truths,  but  I  state  them  because  all  this  vital  information  is  to 
be  had  only  in  A.  A.  A.  reports,  and  less  than  a  hundred  adver- 
tisers are  getting  these  reports.     .     .     . 

There  is  a  law  making  publishers  give  their  paid  circulations  to 
the  Government,  but  these  figures,  even  if  accurate,  are  as  worth- 
less as  a  hobble  skirt,  and  even  more  limited. 

The  Government  simply  asks  for  a  total,  while  we  get  all  the 
Items  that  contribute  to  this  total. 

In  this  report  to  which  I  have  referred  we  give  twenty-three 
pages  of  detail,  while  the  Government  gives  out  less  than  twenty- 
three  words.     .     .     . 

We  have  been  doing  the  work  as  best  we  could  under  handicaps 
LJ^^^^  discourage  any  but  men  who  work  for  a  thing 


412 


CmCUIATION  STANDARDS 


CIRCULATION  STANDARDS 


443 


I      M 


t 


a- 


because  they  believe  in  it  with  a  beKef  that  goes  down  to 
bedrock. 

At  the  same  meeting  of  the  association  at  which  this  address 
was  delivered  there  were  other  discussions  of  various  aspects  of 
the  subject,  and  Louis  Bruch,  Vice-President  of  the  Association 
and  Advertising  Manager  of  the  American  Radiator  Company, 
after  a  further  discussion  of  the  work  of  the  association  in  this 
direction,  offered  the  following  resolution: 

Reiohfed — ^Tbat  for  a  period  of  one  year  the  service  rendered  by  the  Ad- 
vertising Audit  Association  &  Bureau  of  Verified  Circulation  be  utilised  by 
the  Association  of  American  Advertising,  the  cost  for  such  service  to  be  at 
the  rate  of  two  dollars  a  year  for  class  "A"  members,  and  that  the  regular 
Bcrvicc  heretofore  rendered  by  the  A.  A.  A.  be  suspended  for  that  period*  but 
the  organization  itself  to  be  kept  intact  as  at  present. 

Resolved — That  for  the  above  period  of  one  year  the  plans,  records,  and 
equipment  of  the  A.  A.  A.  be  transferred  to  the  Advertisers  Audit  Associaticm 
&  Bureau  of  Verified  Circulations. 

Resolved — That  a  committee  be  apptointed  to  conclude  negotiations  in  carry- 
ing out  the  foregoing  resolution. 

The  meeting  at  which  this  resolution  was  passed  was  held  on 
February  24  and  25, 1914.  On  May  20th  of  the  same  year  there 
was  held  in  Chicago  a  meeting  of  advertisers,  publishers,  and 
advertising  agencies  of  the  United  States  and  Canada,  which  was 
attended  by  200  delegates,  representing  637  concerns.  The  re- 
sult of  the  meeting  was  the  formation  of  the  Advertising  Audit 
Association  and  Bureau  of  Verified  Circulations,  which  was 
formally  organized  on  May  20,  1914.* 

In  October  of  1914  it  was  announced  that  a  corps  of  eleven 
men  were  at  work  for  the  Audit  Bureau  of  Circulations.  The 
list  of  members  who  were  interested  in  the  organization  at  the 
time  of  its  estabhshment  included  the  names  of  301  newspapers 
in  the  United  States  and  9  in  Canada,  49  advertising  agencies, 
76  advertisers,  46  of  which  were  members  of  the  A.  A.  A.;  51 
farm  papers,  27  magazines,  10  weekly  newspapers,  53  class, 
trade,  and  technical  papers,  and  2  supply  catalogues.    The  fol- 

*FruU§n'  Ink,  May  i»,  1014,  p.  10. 


lowing  account  of  the  work  of  the  organization  to  date  is  taken 
from  material  supplied  by  the  Bureau. 

The  growth  of  the  Bureau  since  that  time,  both  in  extent  and 
character  of  work  accomplished,  indicates  that  service  of  this 
kind  is  being  appreciated  in  advertising  circles.  The  figures  for 
one  year's  growth  in  mere  size  alone  are  impressive.  As  of 
September  1, 1915,  the  Bureau  reports  in  its  membership  list  617 
United  States  newspap)ers,  27  Canadian  newspapers,  9  agricul- 
tural weekly  newspapers,  4  foreign  language  weeklies,  and  2 
United  States  and  6  Canadian  weekly  newspapers,  52  magazines 
and  periodicals,  63  agricultural  publications  in  the  United  States 
and  4  in  Canada,  and  106  class,  trade,  and  technical  papers. 

The  efforts  to  standardize  circulation  facts  and  figures  have  a 
legal  as  well  as  a  mathematical  side.  In  the  Appellate  Division 
of  the  Supreme  Court  of  the  State  of  New  York,  Third  Depart- 
ment, a  decision  was  handed  down  in  March,  1915,  defining  a 
"paid  subscriber."  This  decision  was  given  in  the  case  of  Cream 
of  Wheat  Company,  appellant,  versus  the  Arthur  H.  Christ 
Company,  respondent,  and  involved  some  question  as  to  the  size 
of  the  paid  circulation  of  American  Motherhood.  The  opinion 
of  the  court,  prepared  by  Presiding  Justice  Smith,  contained  the 
following  clauses  and  was  concurred  in  by  all  the  court  except 
Judge  Woodward,  who,  dissenting,  took  a  somewhat  different 
view  of  the  situation: 

*Smith,  P  J. — ^Under  the  contract,  which  is  here  for  interpre- 
tation, the  plaintiff  is  entitled  to  recover  if  it  appears  that  the 
defendant  in  1911  and  1912  had  materially  less  than  63,000  "paid 
subscribers."  Upon  the  wording  of  the  contract  alone  the  court 
would  interpret  the  expression  "paid  subscribers"  to  mean 
those  only  who  had  prepaid  their  subscriptions.  The  trial  court 
has  found  that  by  an  established  custom  of  the  trade  the  term 
"paid  subscriber"  has  a  broader  meaning,  and  includes  not 
only  those  whose  subscriptions  had  been  prepaid,  but  any  sub- 
scriber to  whom  the  paper  was  sent  and  who  had  once  j>aid  al- 

*Pnniers'Ink,  April  1,  1915,  p.  45;  see  also  issue  for  April  22,  1915  p.  57. 


hi 


444 


CIRCULATION  STANDARDS 


though  the  subscription  had  not  been  prepaid  for  the  years  in 
question.    This  finding  is  abundantly  supported  in  the  record. 

First.  The  purpose  of  the  contract  is  to  advertise  the  plain- 
tiff's product.  The  actual  circulation  of  the  defendant's  maga- 
zine was  confessedly  over  70,000  copies  per  month,  although 
some  of  these  subscribers  had  not  paid  for  several  years.  The 
magazine  was  only  sent  upon  the  request  of  the  subscriber,  re- 
newed each  year,  upon  which  the  trial  court  has  found  that  there 
was  legal  liability  to  pay.  The  purpose  of  the  insertion  of  the 
advertisement  would,  therefore,  seem  to  be  fully  accomplished 
whether  or  not  the  subscriber  had  in  fact  paid  the  subscription 
price  in  advance. 

Second.  The  contract  itself  in  effect  defines  a  paid  subscriber 
as  one  to  whom  the  paper  was  not  sent  as  a  gift.  The  term 
"circulation  *'  is  therein  described  as  "  the  total  number  of  copies 
of  each  issue  of  the  publication  above  mentioned  which  shall 
be  published  and  sold  and  delivered  by  the  publishers  thereof, 
both  to  paid  subscribers  and  to  news  agencies,  exclusive  of  all 
returns  from  news  agencies  and  copies  given  away  in  any  manner 
whatsoever."  It  appears  that  it  was  the  custom  of  the  differ- 
ent magazines  to  give  away  to  employees,  to  advertisers,  adver- 
tising agents,  to  exchanges  and  for  other  purposes  what  are 
called  service  copies.  These  would  seem  to  be  the  part  of  the 
circulation  that  was  intended  to  be  excluded  by  the  terms  of  the 
contract. 

Third.     The  term  "paid  subscriber**  has  been  construed  by 

the  plaintiff's  general  manager  and  secretary,  who  negotiated  and 

signed  the  contracts  in  question.     In  1912  E.  Mapes, 

Rulina  ^  ^^^  ^^^  plaintiff  negotiated  and  signed  these  con- 
C£^  tracts,  was  upon  the  circulation  committee  of  the  Asso- 
ciation of  American  Advertisers,  which  was  an  associa- 
tion composed  of  about  seventy  or  eighty  prominent  advertisers, 
which  at  its  own  expense  had  audits  made  of  magazines  and 
newspapers  to  determine  the  extent  of  their  circulation,  for  the 
purpose  of  ascertaining  their  value  as  advertising  mediums. 
Among  the  papers  thus  examined  by  this  association  were  the 
Albany  Knickerbocker  Press  and  the  Albany  Times-Union  in 
the  city  of  Albany.  In  that  year  a  contest  arose  between  those 
two  papers  as  to  which  had  the  larger  "paid  circulation." 
This  contest  was  referred  to  a  committee  of  this  association  of 
which  IVIr.  Mapes  was  a  member.  That  committee  decided 
that  in  ascertaining  the  paid  subscription  list  all  those  sub- 


CIRCULATION  STANDARDS 


445 


scribcrs  should  be  counted  who  had  once  paid  and  to  whom  the 
pap>er  was  then  being  sent,  although  no  subscription  had  in  fact 
been  paid  for  fourteen  years.  The  record  does  not  show  whether 
or  not  Mr.  Mapes  assented  to  that  decision,  but  as  he  was  on  the 
committee  which  made  the  decision,  and  it  could  easily  have 
been  shown  if  he  dissented  therefrom,  it  is  fair  to  assume  that 
it  was  his  interpretation  as  well  as  that  of  the  coinuiiltee  of  the 
term  "paid  circulation."  It  is  true  that  this  was  the  interpre- 
tation of  the  term  as  that  applied  to  the  circulation  of  a  news- 
paper and  not  of  a  magazine.  As  the  audit  of  a  newspaper 
circulation,  however,  was  for  the  same  piu*pose  as  the  audit 
of  a  magazine  circulation,  it  is  diflBcult  to  see  why  the  term  should 
have  a  different  meaning  when  applied  to  the  circulation  of 
a  magazine  in  a  contract  for  advertising.  This  interpretation 
of  the  term  made  in  1912  by  the  man  who  negotiated  and  signed 
this  contract  for  the  plaintiff  is  most  cogent,  if  not  controlling, 
evidence  of  what  was  intended  in  the  contract  to  be  included  in 
the  term  "paid  subscriber." 

Fourth.  The  witness  Turner  is  an  expert  accountant,  who 
for  four  years  before  the  trial  had  done  nothing  except  examine 
the  circulation  of  magazines  and  newspapers.  He  had  done 
this  work  under  employment  from  the  plaintiff  and  other  indi- 
vidual advertisers,  and  also  of  the  Association  of  American  Ad- 
vertisers before  mentioned.  Of  this  association  this  man  Mapes 
is  now  the  president  and  was  then  upon  the  circulation  commit- 
tee. He  swears  that  in  making  those  audits  the  entire  circu- 
lation of  the  paper  was  divided  into  two  branches,  paid  and  un- 
paid; that  there  was  included  in  the  paid  class  the  entire  mailing 
list  and  the  news  agencies,  and  in  the  unpaid  class  the  adver- 
tisers and  advertising  agents,  exchanges,  service  copies,  and  em- 
ployees; that  in  the  class  of  paid  subscribers  was  included  all 
subscribers  to  whom  the  magazine  was  sent,  whether  or  not 
payment  had  been  made  in  advance  or  the  subscriber  was  in  ar- 
rears. 

It  is  true  that  few  magazines  continue  to  send  the  paper  where 
the  payment  of  the  subscription  is  far  in  arrears.  That,  how- 
ever, was  a  matter  entirely  within  the  policy  of  each  magazine, 
and  some  were  more  liberal  than  others,  and  that  since  1912 
the  tendency  had  been  to  draw  the  lines  still  closer.  The  plain- 
tiff produced  two  experts,  who  made  the  audits  of  the  defen- 
dant's magazine  for  the  years  1911  and  1912,  in  order  to  ascer- 
tain whether  the  plaintiff  was  entitled  to  any  rebate  under  the 


hi 


I- 


i 


I 


446 


CIRCUIATION  STANDARDS 


contract.    This  audit  was  made,  however,  at  the  request  of  the 
plaintiff,  and  with  a  strict  construction  of  the  term  "paid  sub- 
scriber   as  only  those  who  had  paid  in  advance,  it  was  found  the 
circulation  was  substantially  less  than  63,000  copies  a  month 
Ihe  testimony  of  plaintiff's  main  expert.  Rink,  as  to  what  was 
understood  to  be  included  in  the  term  "paid  subscriber,"  is  un- 
satisfactory and  evasive,  and  in  v^ew  of  the  purposes  to  be  ac- 
complished by  the  contract  in  question  the  trial  judge  was  abun- 
dantly authorized  to  find  that  in  the  custom  of  the  trade  the 
term    paid  subscriber  "  was  not  Hmited  to  those  subscribers  who 
had  paid  m  advance.    An  examination  of  the  evidence  of  the 
two  experts  called  for  the  plaintiff  will  be  found  to  contain  no 
substantial  dispute  of  the  evidence  of  Turner,  the  defendant's 
expert,  as  to  what  was  understood  to  be  embraced  within  the 
term  "paid  subscriber"  in  an  audit  made  for  the  purpose  of 
determming  its  value  as  an  advertising  medium. 

Fifth.     It  appears  that  the  price  of  this  magazine  was  nor- 
mally $1  per  year,  and  that  the  receipts  for  the  years  in  question 
Club      ^^^^  ^^^  subscription  list  were  only  between  $20,000 
Contract    ^^  $30,000.     This  disparity  between  the  circulation 
Not  Specific  ^^^  the  receipts  therefrom  undoubtedly  casts  some 
suspicion  upon  the  good  faith  of  this  circulation. 
There  is  no   question  made,   however,   that   the   circulation 
in  fact  exceeded  70,000  copies  per  month.     Moreover,  while 
the  subscription  price  was  ordinarily  $1  a  year,  it  is  suggested 
in   the  evidence   that   clubs   were  formed   with   a  subscrip- 
tion price  of  50  cents.     So  that  the  actual  paid  subscriptions 
were  not  fau-ly  represented  by  the  actual  amount  of  cash 
received.     It  appears  from  the  evidence  that  other  magazines, 
by  offermg  prizes,  send  their  niunbers  to  many  who  in  fact  pay 
for  the  magazine  much  less  than  the  subscription  price.     Pre- 
sumably the  increased  price  received  from  advertisements  in- 
serted compensate  for  loss  in  the  subscription  price.     These 
facts  were  all  known  to  Mapes  when  he  made  this  contract,  and 
of  the  fact  that  audits  made  for  the  purpose  of  these  associations 
included  m  the  list  of  paid  subscribers  many  whose  subscrip- 
tions were  not  prepaid,  it  is  a  fair  inference  that  if  they  had 
intended  to  provide  only  for  prepaid  subscriptions  he  would 
have  used  more  specific  language  to  that  end.    There  was  no 
hndmg  by  the  trial  court  of  any  bad  faith  on  the  part  of  the 
defendant  in  padding  its  circulation  list,  nor  was  there  any  re- 
quest by  the  plaintiff  8o  to  find. 


CIRCULATION  STANDARDS  447 

The  judgment  dismissing  the  complaint  must  therefore  be 
The  Dis'  aflSrmed. 

aeniing       All  concurred,  except  Woodward,  J.,  who  read 
Opinion    for  reversal. 

Woodward,  J.  (dissenting)—  ...  The  only  question 
at  issue  on  this  appeal  is  the  proper  construction  of  the  con- 
tract: What  is  meant  by  the  words  "paid  subscribers?"  The 
auditors  held  that  it  meant  the  subscriptions  paid  in  advance 
or  during  the  term  of  the  contracts  up  to  the  date  of  the  audit, 
while  the  defendant  contends  that  it  embraces  all  of  the  names 
carried  upon  its  subscription  hst,  some  of  whom  have  paid 
nothing  upon  account  of  such  subscriptions  from  the  time  of  the 
original  subscription,  running  back  to  the  year  1903. 

What  did  the  parties  agree  to?  What  was  their  mutual 
understanding?  That  is  the  real  test  so  far  as  it  finds  expression 
in  language,  and  we  can  get  very  Httle  help  in  determining  this 
question  from  the  evidence  in  reference  to  the  alleged  customs 
of  advertisers,  if,  indeed,  such  evidence  has  any  proper  place  in 
the  case.  Obviously,  without  any  extra  language,  the  guar- 
antee of  the  pubhshers  of  "the  average  circulation"  of  the  publi- 
cation would  be  satisfied  by  showing  that  a  number  equal  to 
or  exceeding  63,000  was  sent  out  each  month  or  that  the  aggre- 
gate for  the  year  reached  this  number  for  each  issue  for  circu- 
lation does  not  necessarily  require  that  the  publication  shall  be 
sold  and  delivered  to  individuals. 

But  the  parties  did  not  stop  with  the  guarantee  of  the  number 
to  be  circulated;  they  stipulated  what  should  constitute  circu- 
lation for  the  purposes  of  this  particular  contract,  and  we  have  a 
right  to  assume  that  in  making  a  definition  they  used  language 
calculated  to  be  accurate — Slanguage  which  conveyed  the  very 
idea  which  they  intended.     Indeed,  the  contract  itself  provides 
how  the  word  circulation  shall  be  construed;  that  is  its  very 
language.     It  "is  understood  and  agreed  that  the  term  ch-cu- 
lation,  for  the  purposes  above  mentioned,  shall  be  construed  as 
follows,"  and  this  court  has  no  right  to  give  to  the  word  any 
other  construction  than  that  provided  for  by  the  contract. 
Limiting       Clearly  the  word  "circulation"  was  intended  to  be 
the  Mean-  modified  in  its  meaning;  it  was  not  to  have  any  general 
up  ""f,     or  uncertain  use,  and  the  cuxjulation  was  the  basis  of 

czm^o-  the  contract— was  the  essential  consideration  for  the 
T'u  making  of  the  agreement  on  the  part  of  the  plaintiff. 

Ihe  language  clearly   indicates  that  the  parties  understood 


i 


448 


CIRCULATION  STANDARDS 


CIRCULATION  STANDARDS 


449 


fl 


that  "circulation,**  as  used  in  the  contract,  was  vague  and 
uncertain;  that  it  did  not  guarantee  any  certain  amount  of 
publicity  of  value  to  the  plaintiff  in  seeking  an  enlarged  market 
for  its  product,  and  for  the  purpose  of  making  definite  and  cer- 
tain what  was  otherwise  indefinite  and  uncertain,  the  parties 
undertook  to  define  circulation,  and  it  was  agreed  that  the  word 
should  be  construed  to  mean  "the  total  number  of  copies  of 
each  issue  of  the  publication  above  mentioned  which  shall  be 
published  and  sold  and  delivered  by  the  publishers  thereof," 
and  if  it  had  ended  here  it  would  not  have  changed  the  general 
meaning  of  the  word,  for  to  publish  is  "to  send  forth,  as  a  book, 
newspaper,  musical  piece,  or  other  printed  work,  either  for  sale 
or  for  general  distribution"  (23  Am.  &  Eng.  Ency.  of  Law,  459), 
and  a  sale  and  delivery  of  the  papers  would  have  been  accom- 
plished when  the  same  had  been  sent  to  those  who  received  them 
with  an  express  or  implied  promise  to  pay  for  the  same.  But 
the  contract  definition  did  not  end  there;  the  parties  had  a 
different  purpose  to  accomplish,  in  so  far  as  the  plaintiff  is  con- 
cerned at  least,  and  so  it  was  provided  further  that  these  maga- 
zines "published  and  sold  and  delivered  by  the  publisher 
thereof"  should  be  "both  to  paid  subscribers  and  to  news  agen- 
cies, exclusive  of  all  returns  from  news  agencies  and  copies  given 
away  in  any  manner  whatsoever."  It  was  not  the  whole  num- 
ber "pubHshed  and  sold  and  delivered,"  but  the  whole  number 
"published  and  sold  and  delivered  .  .  .  both  to  paid  sub- 
scribers and  to  news  agencies,"  excluding  all  copies  returned 
from  news  agencies  as  well  as  all  copies  "given  away  in  any 
manner  whatsoever."  In  other  words,  "circulation,"  as  used 
in  this  contract,  was  to  cover  only  the  papers  "published  and 
sold  and  delivered"  to  two  clavsses — to  "paid  subscribers  and 
to  news  agencies" — and  no  allowances  were  to  be  made  for  re- 
turned copies  from  the  news  agencies  or  for  any  copies  which 
were  given  away  in  any  manner  whatsoever.  This  latter  clause 
had  no  relation  to  subscribers;  it  dealt  with  the  sample  copies, 
with  copies  which  might  be  delivered  to  advertisers  for  their 
own  private  distribution,  as  in  the  case  of  Ashton  v.  Stoy  (30 
L.  R.  A.,  584),  and  with  those  given  out  to  trainmen,  policemen, 
and  others  upon  the  complimentary  list,  and  is  not  to  be  con- 
fused with  the  main  purp)ose  of  the  definition  of  "circulation" 
for  which  the  plaintiff  was  contracting. 

The  learned  referee  has  dealt  with  the  question  exactly  as  he 
would  have  been  called  upon  to  do  in  the  absence  of  the  defini- 


tion; he  has  held,  in  effect,  in  so  far  as  this  controversy  is  con- 
cerned, that  the  defendant  is  to  be  credited  with  all  of  the  copies 
pubhshed  and  sold  and  delivered,  whether  to  paid  subscribers 
or  to  those  who  are  carried  upon  the  books  after  haying  once 
been  subscribers,  though  they  have  never  paid  but  a  single  sub- 
scription and  there  is  no  more  than  an  implied  promise  to  pay. 
He  has  completely  ignored  the  definition  which  the  parties  them- 
selves agreed  should  control  on  the  construction  of  the  word 
"circulation"  and  has  given  it  exactly  the  effect  which  it  would 
have  had  without  the  definition,  and  if  this  may  be  done,  there  is 
very  little  use  in  people  reducing  their  contracts  to  writing. 

There  was  a  distinct  object  in  making  this  definition:  the 
plaintiff  wanted  to  obtain  a  circulation  among  live  people; 
The  Ad-  ^^a^^g  people  who  were  taking  this  magazine  be- 
vertisers  cause  they  were  interested  in  it — because  it  had  an  in- 
Righi  to  dividuality  which  appealed  to  them.  The  intelli- 
Specify  g^^i  advertiser  buys  quality  in  his  advertising  as  well 
Quality  ^  quantity,  and  he  has  a  clear  right  to  stipulate  in  his 
contract  for  any  particular  quality  which  he  may  desire.  If 
the  publisher  does  not  have  the  quaUty  of  circulation  demanded 
by  the  advertiser,  then  he  has  no  right  to  contract  to  dehver 
it.  If  he  enters  into  a  contract  to  furnish  publicity  among 
a  particular  class  of  people  he  is  bound  to  furnish  such  publicity 
or  respond  in  damages,  upon  the  broad  principle  that  where  a 
person,  by  express  contract,  engages  absolutely  to  do  an  act  not 
impossible  or  unlawful  at  the  time,  neither  inevitable  accident 
nor  other  unforeseen  contingency  not  within  his  control  will 
excuse  him,  for  the  reason  that  he  might  have  provided  against 
them  by  his  contract  (Wheeler  v.  Conn.  Mutual  Life  Ins.  Co., 
82  N.  Y.,  543,  550,  and  authorities  there  cited),  and  the  plaintiff 
having  carefully  provided  the  rule  by  which  the  quahty  as  well 
as  the  quantity  of  circulation  was  to  be  determined,  should  not 
be  deprived  of  its  protection  by  a  construction  of  the  contract 
which  utterly  fails  to  give  any  force  or  effect  to  the  rule.  The 
contract  itself,  in  other  parts,  uses  the  word  "paid"  in  its  proper 
sense,  and  why  the  word  should  be  given  any  other  sense,  or 
given  no  sense  at  all,  is  not  clear. 

The  contract  provides  that  the  price  of  the  advertising  shall 
be  $60  for  each  insertion  "less  5  per  cent,  for  cash  if  paid  within 
ten  days,"  and  it  is  provided  that  "the  party  of  the  first  part 
will  pay  to  such  advertising  agents  as  are  designated  by  the  party 
of  the  second  part,  their  regular  advertising  agent's  commission/* 


■  I 


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I 


I 


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450 


CIRCULATION  STANDARDS 


I'li' 


and  again  that  in  the  event  of  the  circulation  being  materially 
less  than  above  stated  the  defendant  will  "immediately  after 
said  examination  make  a  pro  rata  rebate  to  the  said  Cream  of 
Wheat  Company  for  such  shortage  in  circulation,  paying  said 
rebate  in  cash,"  and  finally  that  "in  consideration  of  the  above 
agreement  the  Cream  of  Wheat  Company  agrees  to  pay  the 
party  of  the  first  part,  in  payment  in  full  for  the  insertion  of  the 
above  advertisement,"  etc.  All  of  these  words  from  the  com- 
mon root  are  used  in  their  intelligent  grammatical  sense,  yet  it 
has  been  held  that  in  that  portion  of  the  contract  where  the 
parties  attempted  to  formulate  a  rule  to  govern  in  the  construc- 
tion of  the  word  "circulation"  the  word  "paid"  is  to  be  under- 
stood as  referring  not  only  to  those  cases  in  which  there  has  been 
an  actual  payment,  but  to  all  of  those  instances  in  which  there 
18  an  implied  promise  to  pay  from  the  fact  that  the  magazine 
is  continued  to  an  original  subscriber  years  ago. 

We  are  clearly  of  the  opinion  that  the  learned  referee  erred 
in  this  construction  of  the  contract,  because  it  fails  to  give  any 
"Paid**  Is  ^^^^^  ^  ^^  provision  which  assumes  to  define  what 
the  Actiee  circulation  is  contracted  for  and  because  it  ignores 
Word  in  the  maxim  expressio  unites  est  exclusio  aUerius.  While 
^  Sm*^  *^^  maxim  will  not  be  permitted  to  defeat  the  obvious 
intent  of  the  parties,  where  it  conflicts  with  the  letter 
of  the  contract,  such  intent  must,  nevertheless,  be  discernible 
in  the  context  of  the  contract  itself  (Aultman  &  Taylor  Co.  v. 
Syme,  163  N.  Y.,  54,  47).  Here  the  context  of  the  contract  indi- 
cates clearly  an  intention  to  make  "circulation"  mean  some- 
thing more  than  the  mere  publication  and  delivery  of  a  civeu 
number  of  magazines;  it  specifically  provides  that  it  sh^  be 
confined  to  *'paid  sulwcribers  and  news  agencies,"  and  we  have 
no  poww  to  chan^  that  contract  and  make  it  practically  ig- 
nore the  word  "paid,"  which  is  the  active  word  in  the  definition 
attempted  by  the  parties.  "I  would  wish,"  says  Lord  Bacon 
(IV  Lord  Bacon's  Works,  187),  "all  readers  that  expound  stat- 
utes to  do  as  scholars  are  willed  to  do;  that  is,  first  to  seek  out  the 
principal  verb;  that  is,  to  note  and  single  the  material  words 
whereupon  the  statute  is  framed;  for  there  are  in  every  statute 
certain  words  which  are  as  veins  where  the  life  and  blood  of  the 
statute  Cometh  and  where  all  doubts  do  arise,"  and  the  only  word 
in  this  contract  which  makes  the  latter  part  of  the  definition 
any  limitation  upon  the  ordinary  use  of  the  word  "circulation" 
a£  applied  to  newspapers  and  which  is  "  the  life  and  blood  of  the 


CIRCULATION  STANDARDS 


451 


statute"  is  the  word  "paid."  If  this  is  dropped  out,  then  the 
contract  would  in  effect  read  that  the  party  of  the  first  part 
"guarantees  that  the  average  circulation  of  the  above-named 
publication  shall  not  be  less  than  63,000  copies  per  issue,  ex- 
cluding all  returned  copies  from  news  agencies  and  copies 
given  away  in  any  manner  whatsoever."  Obviously  this  was 
not  the  intent  of  the  parties;  the  contract  fairly  read  con- 
templates the  live,  paid  subscribers  to  the  magazine  dur- 
ing the  period  covered  by  the  contract.  It  was  the  quality 
of  the  circulation  as  well  as  the  quantity  which  the  plaintiff 
sought  to  secure,  and  the  letter  and  the  spirit  of  the  contract 
are  violated  by  including  as  paid  subscribers  persons  who  were 
not  paid  up  at  the  beginning  or  during  the  life  of  the  contract. 
The  primary  meaning  of  the  word  "subscriber"  is  to  write 
underneath,  as  one's  name;  but  it  also  means  to  give  consent  to 
something  written,  to  assent,  to  agree:  and  a  subscriber  is  de- 
fined to  be:  (1)  One  who  subscribes;  one  who  contributes  to  an 
undertaking  by  subscribing;  (2)  one  who  enters  his  name  for  a 
paper,  book,  map,  or  the  like  (Web.  Int.  Die).  To  become  a 
subscriber  to  a  newspaper  includes  some  voluntary  act  on  the 
part  of  the  subscriber,  or  something  which  is  in  effect  an  assent 
by  him  to  the  use  of  his  name  as  a  subscriber.  A  person  to 
whom  a  newspaper  is  sent  without  his  knowledge  or  consent, 
either  expressed  or  implied,  is  not  a  subscriber  within  the  mean- 
ing of  the  statute  (Ashton  v.  Stoy,  30  L.  R.  A.,  584).  To  become 
a  paid  subscriber  requires  not  only  the  act  of  subscribing,  but 
the  act  of  paying,  and  the  defendant's  form  letter,  in  which  the 
old  subscriber  is  asked  to  "please  remember  that  this  order  will 
be  accepted  without  any  remittance  and  pa5Tnent  can  be  made 
later"  strongly  suggests  that  the  so-called  circulation  of  some- 
thing over  seventy  thousand,  yielding  a  revenue  of  only  about 
$30,000  annually  (the  subscription  price  being  $1  per  year), 
is  not  in  any  proper  sense  such  a  paid  subscription  list  as  the 
plaintiff  had  a  right  to  expect  under  its  contract.  "Paid  sub- 
scribers" are  not  persons  who  are  legally  obligated  to  pay,  but 
those  who  have  in  fact  paid,  and  if  the  defendant  wanted  to  sell 
advertising  space  under  the  basis  of  its  general  circulation,  or  to 
subscribers  legally  obligated  to  pay,  it  was  easy  to  provide  for 
that,  but  it  has  no  right  to  specifically  provide  for  one  kind  of 
circulation  and  to  substitute  another  as  "just  as  good,"  for  that 
is  not  what  the  plaintiff  purchased.  The  plaintiff  allowed  all  of 
the  paid  subscribers  up  to  the  time  of  its  audit  in  each  case,  giv- 


m 


I 


i 


I 


i 


452 


CIRCULATION  STANDARDS 


ing  the  defendant  the  benefit  of  any  one  who  had  become  a  paid 
subscriber  during  the  time  under  which  the  parties  were  operat- 
ing under  the  contract,  and  is  entitled  to  recover  in  these  actions. 
The  judgment  appealed  from  should  be  reversed,  and  the 
findings  of  fact  should  be  made  to  harmonize  with  this  con- 
struction of  the  contract,  the  plaintiff  having  judgment  for  the 
amount  of  its  claim. 

There  are  various  problems  connected  with  circulation 
which  are  a  good  deal  less  definite  than  this  question  of  facts 
about  the  volume  of  circulation.  Even  after  the  facts  have  been 
correctly  defined  and  have  been  made  known  honestly,  there 
are  a  number  of  questions  which  puzzle  the  advertiser  and  all 
others  concerned  with  advertising.  For  example,  a  good  deal 
of  attention  has  been  given  to  the  question  of  duplication  of 
circulation,  particularly  among  magazines,  and  there  is  oppor- 
tunity for  a  large  amount  of  good  work  to  be  done  in  this  field. 
One  advertising  agency  in  New  York  City  has  made  an  investi- 
gation of  over  16,000  persons  and  has  tabulated  the  volume 
and  percentage  of  overlapping  in  the  case  of  fifty-two  maga- 
zines.* 

There  is  something  very  reassuring,  although  not  very  scien- 
tific, about  the  following  open  letter  to  advertisers  who  are  con- 
cerned about  duplication,  signed  "by  a  representative.**  What 
this  article  lacks  in  scientific  accuracy  it  partly  makes  up  at 
least  by  the  paragraphs  of  homely  common  sense  which  it  con- 
tains. 

tGentlemen:  I  go  into  your  office  to  find  out  how  things  are 
going,  and  I  find  you  all  perturbed.  You've  just  closed  a  very 
prosprous  year  and  your  advertising  must  deserve  a  lot  of 
credit.  I  expect  to  find  you  in  an  optimistic  frame  of  mind, 
working  out  plans  and  copy  and  going  it  harder  than  ever. 

But,  no.     All  that  is  side-tracked  and  has  been  for  several 

♦This  tabulation  was  made  by  Frank  Seaman,  Inc.,  and  was  printed  in 
AdveHvnng  and  Selling,  January,  1915,  pp.  33.  34,  and  35. 
^Printers  Ink,  February  12,  1914,  p.  66. 


CIRCULATION  STANDARDS 


453 


weeks.     Copy  and  plans  are  in  the  discard:  you're  at  work  on  a 
greater  problem. 

Some  one  of  your  directors  has  asked  you,  "Brown,  how 
much  duplication  is  there  between  the  mediums  we  use.?  There 
must  be  a  tremendous  waste  there.  If  we  could  eliminate  dupli- 
cation, think  how  much  money  we  could  save.** 

You  couldn't  answer  him  off-hand,  and  were  nonplussed. 
Instead  of  feeling  that  what  you've  done  in  the  last  five  years 
puts  you  among  the  advertising  "majors,**  you've  decided  you 
belong  in  the  "bush  league."  A  fine  advertising  manager,  not 
to  know  how  much  of  your  advertising  efficiency  is  wasted  by 
duplication! 

Forthwith  you've  possessed  yourself  with  that  enormity  of 
duplication.    You've  called  your  advertising  agent  on  the  car- 
pet, and  jumped  him  for  his  ignorance.     You've  written  a  list 
of  questions  to  all  the  advertising  managers  you  know. 
Frenzied  You've  taken  a  thousand  names  out  of  the  telephone 

Data  book,  and  written  them,  asking  what  publications  they 
read.  You  carry  a  notebook  and  besiege  people  at 
lunch,  at  the  club,  and  while  visiting  at  their  homes.  You've 
pounced  on  us  poor  solicitors  for  information,  and  half  of  us 
are  working  the  multigraph  overtime  trying  to  get  duplication 
data  for  you. 

Not  a  word  from  me  if  I  don't  know  how  much  my  periodical 
duplicates  with  the  other  ten  you  use:  I  must  get  busy,  find  out 
and  write  you  a  long  letter  about  it,  if  I  want  to  keep  your  busi- 
ness. 

Now  here's  my  letter: 

It  would  doubtless  be  very  interesting  to  know  how  much 
duplication  there  is  between  my  publication  and  A  and  B  and  C: 
but,  in  the  first  place,  it  canH  be^done. 

No  figures  you  can  get  can  be  correct.  Just  because  the  in- 
surance companies  can  say  that  eight  out  of  every  thousand  men 
aged  30  will  die  in  1914,  you  think  you  can  write  a  thousand  men 
and  find  out  what  percentage  of  ten  million  men  read  both  the 
Alpha  Weekly  and  the  Omega  Monthly  and  a  few  others. 

You  forget  that  the  insurance  companies  tabulate  ten  million 
deaths  over  a  period  of  forty  years,  and  then  figure  out  the  pro- 
portion for  a  hundred  thousand  or  so  for  one  year.  Any  insur- 
ance company  that  used  the  thousand  stuff  on  a  ten-miUion  basis 
would  be  haled  before  the  lunacy  commission  in  a  hurry. 

A  hundred  men  of  a  thousand,  aged  30,  die  in  one  community, 


454 


CmCUlATION  STANDARDS 


ii 


while  the  whole  thousand  in  another  live  to  be  31.     The  average 
of  millions  is  eight  to  the  thousand. 
Just  so  with  your  duplication  test. 

If  you  doubt  it,  get  detailed  circulation  statistics  from  half  a 

dozen  publications  and  see  how  easy  it  is  to  make  the  compari- 

Whni  r      ^^^^  ^^  ^^  ^  dozen  different  stories — if  you  leave  out 

Pis^'^]^^  "«^^  *^i«gs.     Only  by  comparing  aU  the  circula- 

Show     tion  of  one  against  all  of  the  others  can  you  get  the 

right  answer. 
The  only  way  you  can  find  out  about  the  Alpha  Weekly  and  the 
Omega  Monthly  is  to  catch  all  their  two  or  three  milHon  at  the 
same  time,  and  get  'em  all  to  tell  you  the  truth  about  whether 
they  read  both  periodicals,  every  issue.  Then  you  would  have 
the  answer. 

Assuming  that  you  do  write  them  all  (no  publication  has  100 

per  cent,  subscription  circulation,  by  the  way)  and  place  before 

On  Quiz    *^^™  *  ^^^  ^^  publications,  many  of  your  best  folks 

zingSui  ^^°'*  ^^®  ^^  trouble  to  answer  you.     Why  should 

scribert    they?    Another  class  expect  some  kind  of  come-back 

or  solicitation,  and  are  afraid  to  answer  for  fear  of 

bemg  bothered. 

In  the  second  place,  if  they  do  answer  you  they  will  put  down 
every thmg  they  read  at  all;  it's  human  nature  to  make  a  good 
showmg,  even  with  strangers.  I  went  to  grand  opera  once  this 
season;  but  if  any  one  asks  me,  "Do  you  go  to  grand  opera?  "  I 
assent  m  a  way  that  indicates  that  I'm  No.  1  on  the  season- 
ticket  list.  In  the  same  way,  the  10  per  cent,  or  so  who  do 
answer  your  question  will  check  off  from  half  a  dozen  to  a  dozen 
publications  they  are  familiar  with— including  the  two  or  three 
they  get  every  week  or  month,  as  published. 

So,  I  say,  the  cards  are  stacked  against  you  from  the  start;  the 
data  you  get  will  not  even  be  correct  for  the  people  who  do  write 
you.  Your  dope  from  a  few  people  is  as  inaccurate  for  the  whole 
number  as  that  of  the  newspaper  which  takes  a  straw  vote  on 
5  per  cent,  of  the  city's  voters — and  invariably  picks  the  wrong 
candidate  as  winner;  second,  the  most  intelHgent  people  (who  do 
read  regularly  and  thoroughly  a  number  of  periodicals)  will  in 
most  cases  not  take  the  trouble  to  reply,  and  the  people  who  do 
reply  will  exaggerate  the  number  of  pubhcations  they  read. 

T^en,  too,  circulation  shifts  like  the  sand  on  the  seashore. 
The  publications  which  reach  80  per  cent,  of  the  same  readers 
this  year  that  they  did  last  year  you  can  count  on  the  fingers  of 


CIRCULATION  STANDARDS 


455 


one  hand — and  use  only  one  finger.     The  range  is  between  20 
and  80  per  cent. 

Even  if  your  dope  was  right  to-day,  it's  wrong  next  season. 


Now,  what  good  came  of  it  at  last/ 

Quoth  little  Peterkin; 
Ah,  that  I  cannot  tell,"  quoth  he, 

"But  'twas  a  famous  victory." 


f< 


Now,  what  of  your  "famous  victory"  when  (if)  you  have 
won  it? 

Are  you  a  fly-by-night  advertiser,  who  only  wants  to  reach  the 
sucker  once,  and  as  many  suckers  as  pxDssible  at  once? 

"The  second  law  of  advertising  is  reiteration." 

Why  do  you  advertise  more  than  once  in  the  same  publication  ? 

To  get  as  close  as  possible  to  100  per  cent,  duplication  for  your 
message. 

You  use  five  or  six  insertions  a  season  in  every  medium  you 
use,  just  to  get  duplication. 

You  put  up  the  same  16-sheet  on  a  thousand  billboards  in  the 
same  city. 

You  use  the  same  card  in  every  street  car  in  the  city  and  gloat 
over  the  fact  that  people  ride  from  two  to  a  dozen  times  a  day, 

And  then  you  are  worried  because  the  same  consumer  may  read 
two  periodicals  and  see  your  advertisement  twice ! 

You  said,  "Old  stuff;  everybody  knows  that,"  when  you  read 
in  the  Curtis  Company's  excellent  "Selling  Forces": 

Constant  repetition  impresses  us  more  than  an  initially  eloquent  plea.  The 
insurance  man  gets  us  on  his  tenth  call  more  often  than  he  does  his  first.  I 
may  notice  a  certain  advertisement  one  week  and  pass  it  by.  The  next  week  I 
see  it  again,  and  say,  "Oh,  yes,  I've  read  about  that  before."  Seven  days 
later  it  comes  along,  and  I  wonder  if  that  isn't  worth  investigating.  About 
the  fourth  or  fifth  time  I  see  it,  it  seems  as  if  I'd  known  it  all  my  life,  and  when 
I  need  such  an  article  that's  the  one  I  buy. 

Yet  you're  disturbed  at  the  fearful  waste  in  duplication  of 
circulation. 

Believe  me,  any  family  which  is  intelligent  enough  to  read 
several  publications  of  the  kind  you  have  wisely  chosen  as  best 
suited  for  your  advertising  is  the  kind  of  family  you  want  dupli- 
cation on. 

The  kind  of  woman  who  is  so  interested  in  efficiently  managing 


456 


CIRCULATION  STANDARDS 


CIRCULATION  STANDARDS 


457 


I 


her  household,  her  family,  and  herself  that  she  takes  Delineator, 
Woman  s  Home  Companion,  Ladies*  Home  Journal,  and  Good. 
Housekeeping  is  the  kind  of  woman  to  whom  your  message  of 
a  new  food  product  or  a  better  vacuum  cleaner  ought  to  be  told 
as  impressively  as  you  can. 

In  almost  every  case  it  takes  time  and  repetition  to  put  over  a 
sale.  If  It  s  an  expensive  article,  sold  only  once,  duplication  is 
mvaluable  m  piling  up  enough  impressions  to  bring  about  that 
one  big-money  sale.  If  it's  an  inexpensive  article,  it  still  takes 
piling  up  of  impressions  to  get  it  bought  and  keep  repeat  orders 
to  maximum. 

No  publication  is  first  in  the  minds  of  all  its  readers.     One 

man  ihmks  Alpha  Weekly  is  the  best  there  is;  he  also  likes  Omega 

Each  Pub-  Monthly  and  a  couple  of  others.     To  him  an  advertise- 

lic^um  Has  ment  in  the  Weekly  makes  the  greatest  impression, 

Undna'    [^  ?very  advertisement  profits  by  the  introduction  of 

the  mdmdual  publication  carrying  that  advertisement 

to  the  consumer. 

at^r  ^W^^\r  ^^^  ^^^^"''s  ^^  Monthly,  while  merely  glancing 

You  profit,  in  the  duplication  of  circulation,  by  reaching  each 
man  through  the  most  efficient  medium  for  reaching  him.  Also, 
by  clinching  that  impression  by  a  second  one,  even  if  it  isn't  as 
strong. 

*k  ^^^ V?u^^l^r^7,  ^^^  °^^^^^'  ^^^  ^^^y  change.     In  one  mood, 
the  stuff  the  Weekly  gives  us  makes  that  the  one  we  pick  first 

A  Fireside  ™°\?^^  P*^^'  ^  another  mood  it*s  the  Monthly.     You 

Glance  at  ^*  different  angles  of  approach  in  duplication  of  cir- 

Circulaiion  culation,  just  as  you  do  when  friends  recommend  a 

man  or  an  automobile. 

Again,  in  the  same  family  the  Weekly  is  ace  high  with  father. 

who  lets  mother  do  most  or  all  of  the  reading  of  the  Monthly. 

Duplication  doesn  t  hurt  any  in  making  both  of  them  decide  thit 

the  Blank  piano  is  the  best  to  buy.    This  concentration  of  in- 

fluence  in  a  given  household  is  no  unimportant  factor. 

Duplication  is  reaUy  intensive  advertising— and  usually  a 
blessing  m  disguise  to  campaigns  that  wouldn't  be  mtensive 
enough  if  the  duphcation-worried  advertising  manager  had  his 
way. 

If  I  were  giving  advice  it  would  be  this; 

(1)  Stop  worrying  about  duplication. 

(2)  Instead,  spend  your  gray  matter  and  your  tune  picking  the 


mediums  most  efficient  for  your  advertising  and  using  them  effi- 
ciently with  good  copy. 

(3)  If  you  think  there's  much  duplication  between  mediums, 
use  different  copy  when  you  use  them  simultaneously. 

(4)  If  you  want  to  criticise  duplication,  you'll  generally  find 
plenty  of  opportunity  in  the  sameness  of  your  own  copy  and 
your  competitors',  and  in  the  sameness  of  this  month's  copy  and 
last  month's  and  the  months'  before.  You  can't  get  away  from 
duplication,  no  matter  how  much  you  want  to.  But  you  can 
cash  in  on  duplication  more  than  you're  doing  when  you  use  the 
same  old  copy  seventy-five  times  or  places  in  a  month. 

Give  the  public  fresher  messages,  with  more  variety — ^and 
say  "  I  should  worry  "  to  duplication. 

John  Wenzell,  ** business  statistician  and  investigator,"  in  the 
following  article  describes  some  suggestive  methods  of  charting 
the  factors  that  reveal  progress  in  the  relationship  between  circu- 
lation and  the  market  covered: 

*It  has  often  been  said  by  advertising  men  that  circulation 
figures  mean  so  little.  This  is  so  true  that  we  have  had  what 
amounts  to  fad  or  fashion  regarding  the  viewpoint  about  circu- 
lation of  any  kind  of  periodical.  There  was  a  time  when  we 
were  all  hypnotized  by  big  circulation,  and  there  was  in  conse- 
quence much  "forced  circulation"  taken  on  to  impress  the  ad- 
vertiser. 

To-day  we  know  better,  and  we  focus  our  attention  more  on 
the  publication's  jield.  Its  strength  or  weakness  is  not  made 
evident  by  bulk  or  lack  of  bulk  of  circulation,  hut  by  the  relativity 
of  the  circulation  figures,  to  the  particular  field,  and  by  the  rate  of 
growth  as  thus  compared. 

To  do  this  with  a  trade  paper  or  class  periodical  is  very  simple, 
but  to  do  it  with  a  newspaper  is  by  no  means  easy.  Yet  a  great 
deal  of  the  claim  and  counter-claim  and  confusion  of  values  about 
newspapers  might  be  cleared  up  if  the  graphic  chart  were  used  to 
analyze  the  field  on  these  principles. 

Suppose  it  is  required  to  present  to  the  public  the  circulation 
of  a  newspaper,  and  also  the  number  of  lines  of  advertising  car- 
ried during  a  period  of  several  years;  the  object  being  to  analyze 

*  Advertising  and  Selling,  Mardi.  1915,  p.  9. 


I\ 


458 


CIRCULATION  STANDARDS 


CIRCULATION  STANDARDS 


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459 


the  growth  of  the  paper  and  show  the  relation  of  its  growth  to 
general  comparative  factors.  Charts  similar  to  those  which  ac- 
company this  article  will  tell  the  story  much  better  and  more 
quickly  than  a  mere  recital  of  the  figures  will  do.  In  fact,  the 
figures  are  all  given  as  a  part  of  the  charts,  so  that  if  one  desires 
to  verify  the  curves  it  can  be  done  without  diflSculty  or  delay. 

For  the  purpose  of  illustration  the  pubHshed  statement  of  a 
New  York  newspaper  has  been  taken,  and  the  charts  were  drawn 
presenting  these  figures.  In  Figure  1  the  circulation  from  1898 
to  the  present  time  is  shown. 

It  is  often  of  value  to  know  whether  the  circulation  of  a  news- 
paper is  keeping  pace  with  the  increase  in  population  of  the 
territory  that  it  serves.  It  is  apparent  that  if  in  ten  years  the 
circulation  of  a  paper  increases  28  per  cent.,  and  during  the  same 
period  the  population  has  increased  32  per  cent.,  the  gross  in- 
crease in  the  number  of  papers  printed  has  not  been  a  net  in- 
crease as  far  as  the  ratio  of  circulation  to  population  is  concerned. 
For  the  purpose  of  showing  the  increase  in  population  the  slant- 
inglines  were  added  to  the  chart  in  Figure  1. 

The  use  of  two  sets  of  lines,  or  "double  co-ordinates,"  as  they 
axe  called,  running  across  the  chart  for  the  purpose  of  reading 

.  the  curve  from  two  different  scales  is  not  frequent, 

D^emu  ^^^pse  their  value  is  appreciated  by  very  few.     In 

Scales  ^liis  instance  they  very  clearly  show  how  many  papers 
were  circulated  per  hundred  people  in  New  York  City. 
It  will  be  seen  that  in  1898  the  circulation  was  less  than  one 
to  each  hundred  population;  while  in  1914  the  chart  shows 
that  more  than  five  people  out  of  every  hxmdred  read  this 
sheet. 

The  method  of  finding  out  where  to  locate  these  slanting  lines 
is  as  follows:  The  population  of  New  York  in  1900  was 
S,437,000.  If  one  person  out  of  every  hundred  read  the  paper, 
the  circulation  would  be  34,370;  if  two,  68,740;  if  three,  103,110. 
etc.  In  1910  the  population  had  increased  to  4,766,000,  so  that 
if  only  one  person  in  a  hundred  read  the  paper  they  would  have 
to  print  47,660;  if  two,  95,320;  and  if  three,  the  required  number 
would  be  142,980,  and  so  on.  The  percentage  of  increase  in  each 
case  is  38.7  per  cent.,  which  was  the  increase  in  population  in 
New  York  City  during  the  decade. 

From  the  foregoing  calculations  it  will  be  seen  that  the  loca- 
tion of  the  1900  per  capita  lines  are  plotted  34,370  units  apart, 
while  in  the  1910  column  47,660  units  is  the  basis  of  measure- 


460 


CIRCULATION  STANDARDS 


ment.    This  acxx)unts  for  the  difference  in  the  angle  of  the  slant- 
ing lines. 

By  comparing  the  progress  of  the  heavy  Hne,  technically  called 
the  curve,  which  represents  the  circulation  of  the  paper  year  by 
year,  it  is  seen  that  although  there  was  a  gain  over  the  preceding 
year  in  the  average  number  of  copies  printed  in  1903,  yet 
the  increase  failed  to  keep  up  with  the  growing  population. 
This  was  also  the  case  in  1905.  From  1909  to  1911  the  in- 
crease of  13,058  just  barely  kept  pace  with  the  growing  popula- 
tion. 

At  the  right-hand  side  of  the  chart  is  placed  the  scale  showing 
the  number  of  papers  circulated  for  every  hundred  people  in 
the  city.  These  are  placed  at  the  ends  of  the  slanting  lines,  and 
serve  as  a  scale  for  them.  They  have  no  connection  with  the 
horizontal  Hues. 

The  growth  of  the  advertising  carried  from  1898  to  1913  is 
shown  in  Figure  2.  In  this  chart  the  double  co-ordinates  are 
used  to  show  the  increase  in  population.  The  slanting  lines  in 
1900  3,437,000  units  apart,  and  in  1910  the  basis  is  4,766,000. 
It  will  be  noticed  that  the  cui^^e  crosses  diagonal  line  1  in  1899. 
At  this  point  the  paper  annually  carried  one  line  for  everj-  person 
in  Greater  New  York.  By  190'^  the  number  of  hues  per  capita 
had  almost  reached  one  and  one  half.  For  the  next  six  years 
the  per  capita  decreased  generally  until  the  panic  of  1907-8. 
It  was  not  until  1909  that  the  1902  per  capita  was  surpassed. 
In  1909  the  number  of  Unes  carried  was  1,692,924  more  than  were 
carried  in  1902,  yet  considering  the  increase  in  population,  the 
per  capita  was  practically  the  same. 

The  growth  in  advertising  since  1908,  and  its  relation  to  the 
increase  in  pK>pulation  is  much  more  apparent  by  comparing  the 
curve  with  the  slanting  lines  than  it  would  be  by  noting  its  rela- 
tionship to  the  horizontal  lines,  and  then  mentally  taking  into 
accoimt  the  fact  that  dimng  the  last  ten  years  the  population 
had  increased  about  a  million  and  a  half. 

It  will  be  quite  clear  from  the  use  of  this  New  York  City  in- 
stance that  a  great  deal  of  important  fundamental  data  about 
circulation  is  to  be  gleaned  by  a  careful  study  of  circulation 
and  the  field  in  this  way.  Trade  papers,  general  magazines, 
class  paj)ers,  and  newspapers  all  could  make  their  situation 
more  clear  by  such  means.  And  if  the  publisher  will  not  do 
it,  advertisers  mil!  Indeed,  they  are  doing  it  now,  as  I  can 
testify, 


CIRCULATION  STANDARDS 


461 


A  careful  examination  of  the  technique  of  this  chart  is  worth 
while  if  one  is  interested  in  the  subject.  On  the  left-hand  side 
of  the  chart  the  scale  of  the  circulation  beginning  at 
^^  Tr//  ^^^  ^^  found.  On  the  bottom  the  years  are  arranged 
^^^^Chart  '^  ^^o™  ^^^*  ^^  right.  At  the  top  of  the  chart  the  average 
circulation  figures  are  given  for  each  year.  The  letter- 
ing is  made  so  that  it  can  be  read  from  the  column  at  the  top  of 
the  chart,  or  from  the  column  at  the  left.  The  base  line  is  much 
heavier  than  the  other  horizontal  lines,  as  it  marks  zero,  the  start- 
ing-point of  the  scale.  This,  according  to  the  leading  authorities 
on  graphic  charts,  is  the  most  approved  method  of  presenting 
the  data. 

One  of  the  most  frequent  faults  with  graphic  charts  is  that  the 
base  line  does  not  begin  at  zero.  While  it  frequently  saves 
space  to  have  the  scale  at  the  left  begin  with  a  number  of  some 
size,  thus  permitting  one  to  make  the  fluctuations  in  the  curve 
more  pronounced,  nevertheless  it  is  very  apt  to  be  misleading, 
as  the  casual  observer  often  does  not  notice  that  the  bottom  of 
the  chart  begins  part  way  up  the  scale.  Therefore  the  impres- 
sion is  apt  to  be  conveyed  that  the  rise  in  the  curve  represents  a 
much  larger  growth  than  there  really  was,  because  we  naturally 
expect  that  the  base  line  of  a  chart  begins  at  zero. 


DIBECT-BY-MAIL  ADVERTISING 


463 


CHAPTER  Xn 


DIRECT-BY-MAIL  ADVERTISING 


WHY  should  there  be  in  this  compilation  a  separate  chap- 
ter devoted  to  what  is  called  "direct-by-mail"  ad- 
vertising? There  are  at  least  two  reasons  either  one 
of  which  would  be  sufficient.  In  the  first  place,  everybody  who 
is  engaged  in  advertising  at  all  uses  direct-by-mail  advertising 
in  some  form,  no  matter  what  other  mediums  he  may  employ. 
His  catalogue,  his  circular  matter,  and  the  various  other  messages 
which  go  from  him  directly  to  his  customers,  to  distributors  of 
his  goods,  and  to  others  come  within  this  field.  In  the  second 
place,  direct-by-mail  advertising  offers  an  opportunity  for  direct 
contact  between  the  advertiser  and  those  engaged  in  distributing 
his  products,  or  the  advertiser  and  the  consumer,  or  both.  For 
this  reason,  it  is  one  of  the  points  at  which  standards  of  truth 
and  service  can  be  set  up  most  satisfactorily  and  with  the  best 
chance  of  securing  results  from  the  tests  upon  which  reliance  can 
be  placed. 

Within  this  field  rapid  progress  has  been  made  within  the 
last  two  or  three  years.  Not  only  is  printing  for  this  purpose 
being  better  done,  but  it  is  being  bought  and  sold  and  used  more 
skilfully.  Not  only  are  mailing  lists  being  much  more  intelli- 
gently compiled  than  they  used  to  be,  but  they  are  being  used 
to  much  better  advantage. 

Direct-by-mail  advertising,  in  short,  is  assuming  the  position 
of  an  indispensable  supplement  to  practically  every  kind  of  ad- 
vertising effort.  Its  service  in  connection  with  this  is  to  reduce 
the  waste  in  the  response  of  advertising  appeal. 

George  L.  Lewis,  Advertising  Manager  of  A.  Stein  &  Co.,  the 

462 


manufacturers  of  the  Paris  Garter,  in  the  course  of  a  short  talk  at 
the  Chicago  Convention  of  the  Associated  Advertising  Clubs  of 
the  World,  spoke  as  follows  on  the  subject  of  the  use  of  direct-by- 
mail  advertising  to  follow  up  other  forms : 

*The  average  advertiser  to-day  is  handicapping  advertising 
more  than  he  is  benefiting  it,  and  logically  it  follows  he  is  handi- 
capping his  own  business. 

You  use  magazines,  newspapers,  posters,  street-car  cards,  or 
whatever  else  you  employ,  to  directly  affect  the  consumer,  the 
fiinal  buyer.  Now,  this  national  advertising  has  its  influence  on 
every  other  phase  of  buying  and  selling  to  a  certain  extent.  But 
national  advertising,  however  strong  it  may  be,  has  its  limita- 
tions; the  magazine,  the  newspaper,  the  poster,  the  street  cars  are 
the  straight  lines  to  the  ultimate  buyer.  But  when  you  try  to 
bend  that  straight  line  into  a  circle  so  that  it  will  also  touch  and 
impel  the  retailer  to  action,  you  are  over-burdening  it.  Your 
advertismg  is  weakened.  There's  Ukely  to  be  a  break  some 
place. 

As  many  of  you  know,  I  made  a  very  careful,  thorough  four- 
year  dealer  analysis.  During  that  period  I  visited  in  the  neigh- 
borhood of  800  retailers  of  every  variety  in  small  and  average 
size  towns  and  in  every  state.  I  have  found  out  how  it  is  possi- 
ble to  get  the  hearty,  willing  co-operation  of  the  retailer.  The 
only  way  to  approach  the  retailer  is  by  the  straight  line,  which, 
interpreted,  means  by  direct  advertising;  approach  him  and  talk 
to  him  directly. 

I  found  where  direct  matter  was  mailed  regularly  between  the 
gaps  of  the  salesmen's  visits  it  was  very  difficult  for  competitors 
to  get  the  retailers'  business.  It  is  only  by  means  of  direct  ad- 
vertising in  one  or  the  other  of  its  many  forms  that  it  is  possible 
to  connect  the  dealer  with  your  national  advertising. 

At  the  same  meeting  Milton  Hartman  of  the  Curtis  Company 
of  Detroit  spoke  of  direct  advertising  as  the  "wasteless  way." 

fDirect  advertising  is  the  wasteless  way,  a  selective  medium  of 
direction  by  which  a  sales  message  may  be  communicated  to  a 
segregated  group  of  individuals  or  in  a  concentrated  zone. 

*  Advertising  and  Selling,  July,  1915,  p.  83. 
^Advertising  and  Selling,  July,  1915,  p.  31. 


1 

I, 


I 


464 


DIRECT-BY-MAIL  ADVERTISING 


Here  are  the  specialized  classes  to  whom  direct  advertising  is 
an  easy  method  of  approach. 

The  Farmer — Who  sells  the  world  food  and  raw  material  and 
is  the  big  buyer  of  the  world*s  manufactured  wares. 

The  Housewife — Here  is  the  biggest  little  spender  since  time 
began. 

The  Professional  Man — ^The  architect — the  physician — the 
dentist — the  lawyer — the  clergyman — the  teacher. 

The  Sportsman — ^A  man  will  indulge  his  hobby  though  he  goes 
without  many  a  real  need. 

The  Workman — ^The  mechanic — the  engineer — the  railroad 
man — the  artisan — the  machinist.  These  men  can  be  cultivated 
by  direct  advertising.  They  may  not  have  the  actual  say  so, 
but  they  have  a  lot  of  influence  in  the  buying  of  tools,  supplies, 
lubricants,  equipments,  etc. 

Broadly  speaking,  there  are  three  classes  of  direct  advertising 
campaigns. 

The  first  is  the  use  of  direct  advertising  as  a  self-sustained 
campaign,  employing  it  to  the  exclusion  of  all  other  media. 
These  instances  are  occasional,  but  several  large  successful  cam- 
paigns of  this  nature  are  now  in  operation. 

The  second  is  the  use  of  direct  aidvertising  in  conjunction  with 
other  media — the  one  having  a  reactionary  effect  on  the  other. 

The  third  is  the  use  of  direct  advertising  as  a  follow-up  to 
some  previous  movement,  thus  vitalizing  it,  and  in  the  instance 
of  direct  advertising  following  up  salesmen's  initial  calls,  accel- 
erating the  work  of  those  salesmen. 

(1)   SUPPLEMENTING   THE  SALES  FORCE 

Some  of  the  ways  in  which  direct-by-mail  advertising  may 
be  used  to  supplement  the  sales  force  are  suggested  in  the  follow- 
ing description  of  the  methods  employed  by  a  concern  making 
pipe  fittings,  which  on  the  face  of  it  do  not  appear  to  be  a  very 
promising  Une  for  sale  by  description: 

*Among  the  other  things  which  a  careful  study  of  the  market 
will  disclose  are  ways  to  make  catalogues  and  printed  matter  do 
part  of  the  work  which  has  hitherto  been  left  to  the  sales  force. 
There  are  very  few  lines  indeed  in  which  catalogues  can  "take 

*PntUer»  Ink,  ]VIay  7,  1914.  p.  76. 


DIRECT-BY-MAIL  ADVERTISING 


465 


the  place"  of  salesmen,  but  there  are  even  fewer  concerns  whose 
catalogues  could  not  be  arranged  so  as  to  help  the  sales  force 
more  than  they  do.  If  an  extra  two  or  three  cents  per  catalogue 
will  save  one  salesman's  call  per  prospect — to  say  nothing  at  all 
about  helping  "close"  the  sale — it  will  be  a  mighty  good  invest- 
ment.    .     .     . 

In  a  future  article  there  will  be  a  discussion  of  the  catalogue 
which  is  a  sales  argument  as  distinguished  from  that  which  is  a 
price-list,  but  the  distinction  between  the  two  should  properly 
be  made  right  here.  Most  price-list  catalogues  for  specialties 
could  be  improved  by  the  addition  of  sales  arguments,  or  by  the 
issuance  of  supplementary  printed  matter  containing  sales  argu- 
ments. That  is  a  sweeping  assertion,  but  I  believe  it  is  fully 
warranted.  For  it  is  the  sales  arguments  which  get  the  "come- 
backs" with  information  about  the  prospect's  own  business,  and 
every  bit  of  information  of  that  character  puts  the  salesman  just 
that  much  nearer  closing  the  sale.  Just  what  the  addition  of 
sales  arguments  can  do  is  well  illustrated  by  the  experience  of 
M.  B.  Skinner  &  Co.,  Chicago,  distributors  for  James  McCrea  & 
Co.  (pipe  repairs  and  steam  specialties). 

Probably  there  is  no  other  line  of  specialties  in  which  the  price- 
list  catalogue  is  more  in  evidence  than  here.  The  vice-president 
of  one  of  the  largest  steam-specialty  houses  writes  that  he  has 
been  compiling  catalogues  for  twenty  years,  and  adds  that  he 
does  not  believe  that  the  experience  of  any  one  else  would  be  of 
the  slightest  use  to  him.  His  catalogue  is  a  big  price-list,  ex- 
cellent as  a  reference  book,  and  giving  every  necessary  detail  to 
enable  the  customer  to  order  the  goods.  But  all  the  preliminary 
work  of  getting  the  customer  to  the  point  of  ordering  is  loaded 
upon  the  salesman  and  the  local  dealer.  Contrast  the  fore- 
going with  the  experience  of  the  Skinner  people,  as  told  by 
Advertising  Manager  K.  G.  Merrill: 

"One  can  scarce  imagine  a  *  colder,'  more  unsympathetic 
sort  of  a  business,"  says  Mr.  Merrill,  "than  that  of  marketing 
steam  specialties — to  be  specific,  pipe  and  valve  repairs.  The 
very  name  conjures  visions  of  dusty,  sweating  pipes  and  hissing, 
equally  dusty  valves.  Moreover,  they  are  repairs  of  the  kind 
needed  only  in  emergencies. 

"When  in  trouble,  a  person's  first  impulse  is  to  appeal  to  an- 
other for  help.  How  should  we  make  our  devices  seem  human 
enough  to  receive  first  thought.'*  Obviously  by  introducing  a 
character  to  be  used  in  our  advertising  matter  who  should  be 


' 


li 


406  DmECT-BY-MAIL  ADVERTISING 

warm  but  not  irrelevant  nor  out  of  place.  The  usual  charocters, 
children,  girls,  animals,  were  rejected  as  unsuitable.  Mr.  Skmner 
and  I  talked  it  over  for  days,  and  we  finally  decided  to  use  an 
engineer  typical  of  the  best  in  his  profession. 

"One  day  while  casting  about  in  my  mind  for  a  fit  person 
the  engineer  of  our  building,  radiating  good  nature,  entered  the 
office  to  talk  to  the  business  manager.  Like  a  flash  he  was 
nominated  for  the  office  and  his  consent  was  straightway  ob- 

"Then  began  the  planning  of  our  first  circular.  1  he  reverse 
side  was  to  show  our  genial  engineer— whose  name,  by  the  way, 
was  Deephouse— applying  our  clamps,  reseating  valves  with  our 
tools,  and  always  showing  his  happy  face.  Old  stuff  but  always 
effective.  But  the  big  part  of  the  job  was  to  make  the  front—- 
the  address  side— attractive;  the  illustration  and  the  caX^- 
phrase  sufficiently  enigmatic  to  compel  further  perusal,  and  the 
whole  to  possess  an  originality,  a  warmth,  a  unity  that  would 
make  it  stick  in  the  mind  of  the  average  engineer. 

"As  the  circular  was  to  illustrate  two  groups  of  devices— pipe 
repairs  and  valve  reseaters— I  wanted  to  use  the  word  twins 
in  my  catch-phrase.  So,  after  Deephouse  (which  name  for  the 
purpose  of  our  circular  we  had  changed  to  Deepthought)  had 
posed  in  various  attitudes  for  the  reverse  side,  I  told  the  pho- 
tographer to  take  the  last  picture  *on  signal.'  Then  I  handed 
Deephouse  two  cigars,  one  of  which  he  promptly  put  m  his 

mouth.  •1T41-J.T* 

"  *Your  nerves  are  healthy,  aren't  they?    said  1;    but  im 

going  to  smoke  that  other  one !  * 

"*This  one?'  he  said,  holding  it  toward  me;  *you  11  never  see 
that  cigar  again,'  and  his  face  expanded  into  one  of  his  whole- 
hearted grins.  ,    ,     *      X    *  *u 

"At  that  moment  the  camera  clicked,  and  the  front  of  the 
circular  shows  the  result.  With  that  we  decided  upon  *  Twins, 
by  George,'  for  our  catch-phrase.  Could  any  proud  father  more 
look  the  oart? 

"The  body  matter  on  the  reverse  side,  far  from  the  usual 
cold,  mechanical  statements,  was  made  simple,  direct,  and  good- 
natured— a  style  of  talk  I'd  found  successful  when  a  salesman. 
It  contained  the  principal  facts  set  forth  in  our  catalogue,  but 
boiled  down  and  presented  forcefully— we  did  not  scorn  an  epi- 
gram here  and  there.  The  name  Deepthought  was  used  only 
in  little  sentences  set  in  six-point  type  under  the  pictures  on  the 


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467 


reverse  side— *  Mr.  Deepthought  reseating  a  valve,'  *  Mr.  Deep- 
thought  applying  an  emergency  pipe  clamp.'  We  didn't  want 
to  rush  the  idea  the  first  time. 

"We  had  the  work  done  in  two  colors  by  a  good  printer. 

The  sales  records  show  that  this  circular  kept  themonth's 

^]^^w^h  ^usifiess  about  tlie  same  as  the  corresponding  month  the 

S^  y^<^^  More,  when  twice  the  sales  work  had  been  done 
among  the  trade, 

"Encouraged  by  our  success,  we  immediately  started  on  a 
follow-up  circular,  this  time  to  feature  the  name  Deepthought. 
In  contrast  to  the  former  circular  it  was  in  story  form — a  con- 
versation between  the  old  engineer  (Deepthought)  and  a  green 
hand.  This  time  the  head  alone  was  shown  on  the  address  por- 
tion, and  simply  the  word  Deepthought  as  a  catch-phrase.  A 
return  card  was  enclosed  and  the  argument  for  keeping  our  re- 
pairs on  hand  for  emergency  launched  with  full  force. 

"The  return  cards  poured  in,  together  with  letters  from  job- 
bers asking  for  packets  of  circulars  for  local  distribution. 
Many  consumers  who  had  not  been  heard  from  in  years  *came 
across.'  The  great  house  of  Crane  Company  asked  that  we 
print  a  quantity  of  these  circulars  over  its  name. 

"We  brought  out  our  third  circular  a  month  or  so  later,  and 
showed  Deepthought's  face  in  silhouette  and  the  catch-phrase 
'Recognize  me?'  It  was  an  imitation  typewritten  business 
letter — straight  from  the  shoulder.  A  coupon  was  included  and 
the  recipient  was  invited  to  *see  how  easily  this  card  tears  off— 
we've  started  it  for  you.'  (It  was  die-cut  for  half  an  inch  from 
the  edge.)  This  circular  cost  but  one  half  as  much  as  the  others 
but  pulled  just  as  hard." 

The  folders  described  by  Mr.  Merrill  were  not  designed  to  do 
away  with  Uie  company's  catalogue;  in  fact,  the  price-list  cata- 
logue was  featured  m  the  folders.  M.  B.  Skinner,  president 
and  manager  of  James  McCrea  &  Co.,  says  that  the  folders  have 
been  "  infinitely  more  successful  as  business  getters  than  the  cata- 
logues. These  folders  pulled  as  much  business  this  summer  as 
the  salesmen  did  last  summer." 

The  present  writer  has  no  intention  of  attacking  the  price- 
list  catalogue.  It  is  valuable  as  a  reference  book,  and  is  abso- 
lutely indispensable  in  many  fines.  But  unless  it  is  supple- 
mented by  frequent  salesmen's  visits,  or  by  other  printed  matter 
containing  sales  arguments,  it  is  quite  likely  to  remain  passively 
gathering  dust  in  a  pigeon-hole.    Salesmen's  visits  cost  money. 


\>\ 


468 


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DIRECT-BY-MAIL  ADVERTISING 


469 


and  if  a  series  of  three  or  four  five-cent  folders  (including  post- 
age) can  take  the  place  of  only  one  visit  per  prospect,  the  saving 
is  worth  thought. 

(2)   SOME   USES   OP  THE   CATALOGUE 

Roy  W.  Johnson  of  the  Printers'  Ink  staff  recently  prepared 
a  series  of  articles  on  the  making  and  using  of  catalogues.* 

In  the  course  of  this  series  Mr.  Johnson  had  one  article  headed 
"Catalogues  That  Tell  How,"  in  which  he  calls  attention  to  the 
necessity  for  a  dear  understanding  of  the  purpose  of  a  catalogue 
before  preparing  it.  In  this  article  the  following  cases  are  de- 
scribed: 

fThe  most  important  factor  in  the  production  of  a  good  cata- 
logue is  a  perfectly  clear  idea  as  to  exactly  what  the  catalogue 
is  meant  to  accomplish.  Don*t  interrupt  with  the  trite  remark 
that  the  catalogue  is  meant  to  "sell  goods."  The  most  any 
catalogue  can  do  in  that  direction  is  to  procure  an  order  for 
goods.  Something  must  happen  after  the  receipt  of  the  cata- 
logue before  any  goods  are  actually  sold,  and  that  something 
generally  happens  in  the  mind  of  the  customer.  Selling  goods 
is  a  more  or  less  remote  object  of  the  catalogue.  Its  immediate 
object  is  tit  tell  someihingy  and  a  definite  idea  of  what  it  is  to  tell 
is  the  prime  requisite  of  a  good  catalogue. 

One  of  the  first  lessons  the  successful  catalogue  writer  learns  is 
that  the  catalogue  is  not  merely  a  piece  of  descriptive  writing. 
Description  plays  a  most  important  part  in  the  catalogue,  but 
the  true  catalogue  is  not  descriptive;  it  is  expository.  In  other 
and  plainer  words,  it  tells  lum  to  do  soTnething.    The  sum  total 


♦The  "Loose-leaf"  Catalogue  vs.  the  Bound  Book,  September  16,  1915, 
p.  57;  Keeping  the  Catelogue  "Alive"  in  the  Hands  of  Prospects,  May  27, 
1915.  p.  84;  Catalogues  That  Tell  "How,"  December  24,  1914,  p.  19;  Im- 
proving the  "Style  Book"  Catalogue.  August  6,  1914,  p.  22;  How  Market 
Data  Built  a  Catalogue,  July  9,  1914,  p.  72;  Judging  the  Value  of  Data  for  the 
Catalogue.  June  18.  1914,  p.  63;  Study  of  the  Product  for  Catalogue  Pur- 
poses, June  4,  1914,  p.  54;  Sales  Co-operation  by  Catalogue,  May  14,  1914, 
p.  67;  Catalogues  Which  Save  Sales  Effort,  May  7.  1914,  p.  76;  Catalogues 
Which  Influence  Future  Buyers,  April  30,  1914,  p.  23;  Catalogues  That  Fit 
the  State  of  Mind  of  the  Consumer,  April  23.  1914,  p.  28;  Building  the  Cata- 
logue to  Meet  Market  Conditions — 1,  April  16,  1914,  p.  49, 

^PrirUerilnk,  December  24.  1914,  p.  19. 


of  the  impression  left  by  a  good  catalogue  in  the  mind  of  the 
prospect  is  not  merely  the  conviction  that  So-and-So*s  goods  are 
made  of  proper  materials  in  the  right  way,  but  it  is  the  conviction 
that  So-and-So*s  goods  will  enable  the  prospect  to  accomplish 
something  more  easily  than  the  same  thing  can  be  done  with- 
out them.  If  So-and-So  makes  shoes,  his  consumer  catalogue 
will  tell  haiv  to  get  foot  comfort  and  long  wear.  His  dealer 
catalogue  will  tell  how  to  sell  more  shoes  at  a  profit.  If  he 
makes  musical  instruments,  his  catalogue  will  tell  how  to  enter- 
tain, how  to  get  more  pleasure  from  one^s  evenings,  etc.  If  he 
makes  soap,  his  catalogue  will  tell  how  to  beautify  the  complex- 
ion, hmo  to  save  wear  and  tear  on  the  clothes,  and  so  on. 

I  have  often  thought  that  every  catalogue  should  have  a  sub- 
title, carefully  thought  out,  and  commencing  with  the  word 

Give  the  "how.'*  The  sub-title  need  not  be  printed,  nor 
Caialogue  even  written,  but  it  should  be  before  the  mind  of 
«  Working  the  catalogue  writer  continually.  Reference  has  al- 
ready  been  made,  in  a  previous  article,  to  the  cat- 
alogue of  the  Burroughs  Adding  Machine  Company  for  retail 
stores.  Before  a  line  was  written  the  sub-title  had  crystal- 
lized into  "how  the  retailer  can  go  home  on  time,"  and  in 
writing  the  book  we  never  lost  sight  of  it.  Everything  which 
went  into  the  book  was  regarded  from  that  standpoint,  and 
many  things  which  would  seem  to  be  obvious  catalogue  mate- 
rial were  discarded  because  they  could  not  be  made  to  harmonize 
with  that  conception  of  its  pmpose. 

Another  Burroughs  book  for  which  I  was  responsible  was  the 
manual  of  instructions  for  users  of  the  machine.  As  it  hap- 
pened, the  sub-title  in  that  case  was  pretty  easily  arrived  at: 
"how  to  operate  and  care  for  your  adding  machine."  I  was 
appointed  to  the  task  very  shortly  after  my  connection  with  the 
company,  when  my  own  knowledge  of  the  operation  of  the 
machine  was  very  limited  indeed.  One  day  a  department  head, 
whom  I  had  been  bothering  for  information,  complained  to 
Advertising  Manager  Lewis: 

"Why  on  earth  didn't  you  get  somebody  to  write  that  book 
who  knows  something  about  the  proposi  cion  .'^ "  he  said .  *  *  Simply 
because,"  Lewis  replied,  "the  purchaser  of  the  machine  doesn't 
know  anything  about  it,  either,  and  he  wants  to  be  told  the  whole 
story.  Johnson  will  go  around  here  and  ask  every  fool  question 
that  any  user  will  ever  ask,  and  he  will  pester  everybody  in  the 
ylace  until  he  finds  out.    Then  he  will  put  it  all  down  in  black 


470 


DHtECT-BY-MAIL  ADVERTISING 


and  white,  because  it  is  new  information  which  he  is  interested 
in.  Most  of  the  things  which  are  too  obvious  to  be  mentioned 
are  the  very  things  the  user  needs  to  be  told,  and  the  greenhorn 
will  get  them  because  they  aren't  obvious  to  him.  When  he  gets 
through  we'll  have  a  book  which  will  be  vitally  interesting  to 
the  new  user  of  the  machine,  though  it  won't  interest  the  fac- 
tory a  little  bit.     It  isn't  meant  to." 

It  all  boils  do^vn  to  the  question  of  finding  out  just  what  the 
reader  of  the  catalogue  needs  to  be  told,  getting  a  clear-cut  con- 
ception of  it,  and  then  going  ahead.  No  two  catalogue  prob- 
lems are  precisely  alike,  and  it  requires  some  really  original 
work  in  each  case  if  the  catalogue  is  to  fit  the  conditions.  The 
big  thousand-page  catalogue  of  the  Yale  &  Towne  Manufactur- 
ing Company  consists  almost  exclusively  of  descriptions  and 
specifications  of  the  goods  themselves,  and  the  Victor  "Book 
of  the  Opera"  entirely  subordinates  the  goods  to  a  description 
of  something  else.  They  are  entirely  different,  yet  both  are 
excellent  examples  of  catalogues  built  upon  the  plan  suggested. 
Both  are  expository.  The  one  tells  the  dealer  "how  to  main- 
tain a  stock  of  good  hardware,"  and  the  other  tells  the  music- 
lover  "how  to  study  the  opera  at  home." 

During  the  past  two  years  the  writer  has  examined  upward 
of  600  different  catalogues,  some  of  which  have  been  com- 
mented upon,  while  others  have  been  set  aside  for 
re^^^  future  comment.  Out  of  the  latter  I  have  select^ 
Catalogues  ^^p  which  seem  to  illustrate  particularly  well  the 
point  I  am  trying  to  emphasize.  One  is  the  book  of 
the  James  Manufacturing  Company,  Fort  Atkinson,  Wis.,  makers 
of  Sanitary  Bam  Equipment,  and  the  other  is  the  catalogue  of 
the  Crouse-Hinds  Company,  Syracuse,  N.  ¥.,  featuring  a  fine  of 
electrical  supphes  known  as  Condulets.  Both  books  are  copy- 
righted, and  the  quotations  and  reproductions  herewith  are  made 
by  permission. 

Those  books  are  about  as  unlike  as  two  catalogues  could  pos- 
sibly be.  The  one  goes  to  the  non-technical  farmer,  who  needs 
to  be  "sold"  on  every  statement  which  is  made,  while  the  other 
goes  to  the  dealer  in  electrical  supphes  and  to  the  electrical  con- 
tractor— semi-technical  men,  who  are  already  convinced  of  their 
need  for  the  kind  of  goods  advertised.  Yet  both  catalogues  are 
expositor^'  from  the  first  page  to  the  back  cover.  Let's  take 
them  up  separately  and  see  wherein  they  differ  from  catalogues 
which  merely  describe  the  goods. 


DIRECT-BY-MAIL  ADVERTISING  471 

The  Barn  Equipment  Book  is  entitled  "The  James  Way. 

and  puts  Its  sub-title  in  the  first  paragraph.     Under  the  heading 

Con^isteni     ^  i^ersonal  Talk  by  IVir.  James,"  the  first  page  of 

Purpose  of  t^xt  begms  as  follows:  "Now  that  we  are  issuing  a 

c7sV£''^u^,'^^^''^^'  ^^^  advertising  department  seems  to 
loguf  ^^'?^  \  ^"ght  to  start  it  off  with  a  talk  about  how  to 
make  ham  work  easy^  There  you  have  the  flag 
nailed  to  the  mast  and  it  is  kept  fluttering  throughout  the  %55 
pages  Not  only  does  the  book  tell  how  to  make  barn  work  easy 
but  also  how  to  make  more  money  out  of  the  daiiy  herd." 
The  two  appeals  are  skilfully  intermingled.  "Now  don't  you 
see,  says  Mr  James  at  the  close  of  his  introduction,  "that 
whether  you  buy  James  Equipment  or  not,  you  are  paying  for 
It  anyhow— paying  for  it  in  unnecessary  cost  of  caring  for  the 
cows  m  the  barn  m  wasted  feed,  extra  help,  loss  of  time,  ruined 

tt^^sl^ll^S'^^  ^^'  ^""^'^  "^^^^  --^^  ^  P---t^d 

Why  not  take  this  money  that  is  being  expended  without 
getting  anything  permanent  in  return  for  it,  and  change  it  into 
an  mvestment  that  will  pay  baek  a  big  profit  eveiy  y^? 
Can  you  afford  not  to  modernize  your  barn  the  James  way?" 
1  hen  the  book  proceeds  to  deal  with  the  separate  items  of 
James  equipment  beginning  with  cowstalls  and  stanchions 
and  continuing  with  pens,  mangers,  manure  and  litter  hoists, 
ventilating  systems,  and  so  on.  Plenty  of  selling  talk  is  given 
showmg  the  advantages  of  the  device,  its  construction  in  detail! 
how  easdy  it  may  be  installed,  etc..  not  forgetting  testimonials 
from  users  and  plenty  of  pictures  of  barn  interiors  showing  the 
equipment  m  actual  use.  Those  pictures,  by  the  way,  are  one 
of  the  features  of  the  book,  being  full  page  in  size  (some  ar« 

around  '  ^^  "'^  ^^^  ^^  ''^  ^^^  P^P^'  ^ 

As  just  a  Simple  of  the  sales  talk  I  quote  the  following  first 
paragraphs  of  the  section  on  cowstalls  • 

«r  !^f  ff'^'  have  been  used  to  thinking  of  a  cow-stanchion 
OT  cowstaU  as  merely  a  convenient  means  of  tying  the  cow. 
in  course,  that  is  its  first  purpos^and  a  stanchion  or  a  stall 

vahe^™^  ^"'^  *°  ^**  "  ^^^  ''**™  '"^^  ™°^*  o^  'ts 

"James  stalls  and  stanchions  do  tie  the  cows,  all  right— tie 


I 


An 


DIRECT-BY-MAIL  ADVERTISING 


them  so  they  can't  get  loose  until  they  are  turned  loose — ^but 
they  are  far  more  than  mere  mere  cow-ties. 

"James  stalls  and  stanchions  insure  comfort  for  the  cow,  keep 
the  stalls  and  the  cows  clean,"  etc.  The  things  the  stalls  will 
accomplish  are  enumerated,  and  then  the  farmer  is  shown  ex- 
actly how  they  are  accomplished — all  in  the  same  informal  style. 
At  the  end  of  the  section  the  dimensions,  specifications,  and 
prices  are  summed  up  in  a  few  pages  conventionally  arranged. 
The  same  plan  is  followed  with  respect  to  each  line  of  goods 
mentioned.  There  is  a  section  on  barn  construction  which  is 
illustrated  with  an  elaborate  set  of  architects'  blueprints,  and  a 
six-page  list  of  the  names  and  addresses  of  users  of  James  equip- 
ment. The  company  does  not  forget  to  play  up  its  own  organi- 
zation— the  size  of  its  factory,  its  growth,  the  men  back  of  it,  etc. 
— but  that  feature  is  placed  where  it  belongs,  over  toward  the 
back  of  the  book.  The  book  closes  with  the  offer  of  free  advisory 
service  furnished  by  the  company's  architectural  department. 

The  book  as  a  whole  gives  the  farmer  every  bit  of  informa- 
tion he  needs,  down  to  the  prices  of  parts.  But  it  is  far  more 
than  mere  information,  because  it  is  applied  so  far  as  is  possible 
to  the  specific  needs  of  each  individual  reader.  It  does  not 
merely  describe  something  which  remains  detached  from  his 
needs  and  his  experience,  leaving  him  to  make  the  connection 
if  he  feels  like  it.  In  brief,  when  the  reader  closes  the  book  he 
can  feel  that  he  has  been  told  how  to  accomplish  something 
which  he  would  hke  to  do  and  which  is  worth  doing. 

So  much  for  the  example  of  an  expository  catalogue  for  the 
non- technical  reader;  the  reader  who  needs  to  be  informed  con- 
cerning the  use  of  the  goods,  and  who  must  be  educated  to  the 
value  of  better  equipment.  How  about  the  catalogue  of  goods 
which  go  to  users  who  do  not  need  educating?  There  are  hun- 
dreds of  concerns  who  deal  in  supplies  of  one  kind  and  another 
the  use  of  which  is  perfectly  familiar  to  every  reader.  How 
can  a  catalogue  addressed  to  them  be  made  more  than  a  de- 
scription and  tabulation? 

Again  it  is  a  question  of  getting  a  clear  comprehension  of  exactly 
what  the  catalogue  is  meant  to  do,  and  of  arranging  the 

J^c^nn^    material  so  as  to  accomplish  that  end.     A  purchasing 

to  Buy  agent  may  have  two  catalogues  before  him  which  fea- 
ture exactly  parallel  hues.  He  may  have  no  prefer- 
ence so  far  as  quality  goes,  and  may  be  quite  willing  to  buy  from 
either  concern.    Other  things  being  equal,  he  will  order  every 


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473 


time  from  the  catalogue  which  makes  it  easier  for  him  to  find 
the  specifications  he  wants.  He  doesn't  want  sales  arguhients, 
doesn't  need  instructions  in  the  use  of  the  product;  but  he  does 
want  to  save  time  and  energy.  He  wants  to  know  hmv  to  buy 
exactly  the  right  goods  with  least  trouble.  So  we  find  that  this 
sort  of  catalogue  is  expository  also,  only  the  exposition  is  in  the 
arrangement  rather  than  in  words. 

This  brings  us  to  the  Crouse-Hinds  Company's  catalogue, 
which  is  a  specific  illustration  of  what  I  mean.  The  company 
makes  a  long  Une  of  electrical  supplies,  such  as  switch-covers, 
lamp-receptacles,  etc.,  which  go  under  the  general  name  of 
Condulets.  It  takes  208  pages,  9x12  inches,  to  feature  the  en- 
tire line,  yet  the  whole  catalogue  is  practically  condensed  into 
the  first  18  pages  by  means  of  a  pictorial  index.  This  index  not 
only  gives  the  name  and  the  type  letter  of  each  item,  but  also 
a  four-color  reproduction  of  it,  and  refers  to  the  page  on  which 
the  complete  specifications  are  to  be  found. 

F.  W.  Clary,  manager  of  the  company's  publicity  depart- 
ment, says  regarding  the  index: 

"The  index  performs  two  functions.  First,  from  an  illus- 
trative standpoint,  it  condenses  the  book  into  eighteen  pages, 
thereby  facihtating  the  efforts  of  the  individual  to  choose  a 
Condulet  or  Condulet  Fitting  for  a  certain  requirement  when 
he  does  not  know  whether  or  not  there  is  a  Condulet  or  Fitting 
exactly  suited  to  the  requirement.  Without  the  pictorial  index 
this  individual  would  have  to  look  through  each  page  of  the 
catalogue.  The  second  function  applies  to  the  individual  who 
knows  what  a  certain  Condulet  or  Fitting  looks  like,  but  does 
not  know  its  type  letter.  He  runs  over  the  index  until  he  lo- 
cates the  illustration  of  the  desired  type,  where  he  finds  the 
type  letter,  and  refers  to  the  listing  thereof. 

"This  pictorial  index  also  serves  as  a  regular  index  to  the  per- 
son who  IS  familiar  with  the  type  letter  of  the  Condulet  or  Con- 
dulet Fitting  desired.  He  runs  through  the  reference  columns 
until  he  locates  the  type  letter  in  mind,  at  which  point  he  is  re- 
ferred to  a  certain  page  or  a  group  of  pages. 

"It  was  expected,  and  has  proved  to  be  the  case,  that  the 
colored  illustrations  would  greatly  reduce  the  number  of  re- 
quests for  sample  Condulets.  Furthermore,  it  has  proved  to  be 
of  material  assistance  to  the  salesmen,  in  that  they  do  not  have 
to  carry  as  many  samples  as  before  the  catalogue  was  issued." 

Such  a  feature  is  expensive,  particularly  when  you  reflect 


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that  it  includes  upward  of  400  cuts,  some  of  them  in  two  and 
three  colors.  But  the  company  finds  that  it  pays.  In  its  pre- 
vious catalogue,  issued  three  or  four  years  ago,  the  idea  was 
first  tried  out,  the  index  occupying  five  pages  printed  in 
one  color.  The  enlargement  of  the  feature  in  the  company's 
present  catalogue  shows  pretty  well  what  the  company  thinks 
of  it. 

The  same  idea  is  carried  out  in  the  arrangement  of  the  detailed 
specifications.     Mr.  Clary  writes: 

"The  entire  catalogue  is  systematically  divided  into  groups 
of  listings,  which  cover  individual  groups  of  Condulet  Fittings, 
which  are  considered  by  us  and  the  trade  as  a  family,  because 
they  are  designed  for  a  particular  purpose,  the  only  difference 
being  a  slight  variation  in  shape  or  location  of  hub.  You  \\ill 
note  the  first  page  of  these  family  groupings,  which  is  always  a 
left-hand  page,  serves  as  a  separation  between  groups,  illus- 
trates the  various  covers  or  fittings  that  can  be  used  with  the 
Particular  family,  and  also  conveys  the  idea  of  interchangea- 
ility  of  these  covers  and  fittings. 

"The  individual  listings  are  so  planned  that  an  illustration 
representing  all  the  material  covered  thereby  is  blocked  in  with 
each  listing,  avoiding  the  possibihty  of  confusion  in  regard  to 
the  listings  on  the  individual  pages." 

It  is  perfectly  evident  to  anybody  that  a  great  deal  of  ex- 
pense and  a  lot  of  the  hardest  kind  of  detail  work  could  have 
been  saved  by  making  the  catalogue  simply  a  straightout  de- 
scription of  the  goods.  In  that  case  it  probably  would  contain 
somewhere  within  its  covers  every  single  bit  of  information 
which  is  there  now.  But  would  it  be  as  good  a  catalogue? 
Most  emphatically  it  would  not.  As  it  is,  it  is  expository,  be- 
cause it  shows  the  prospect  hcno  to  find  what  he  wants,  even  if 
he  doesn't  know  the  name  of  it. 

Some  catalogues  must  go  out  and  create  a  desire  for  the  goods 
which  are  for  sale,  while  others  must  only  show  where  an  ex- 
isting desire  can  be  satisfied.  They  require  totally  different 
treatment,  but  the  success  of  either  variety  depends  upon  some- 
thing besides  the  accuracy  with  which  the  goods  are  described. 
That  something  begins  in  the  mind  of  the  man  who  writes  the 
catalogue,  and  takes  definite  shape  as  he  studies  his  problem 
from  every  angle.  The  success  of  his  work  is  likely  to  be  in  di- 
rect proportion  to  his  understanding  of  exactly  what  the  im- 
mediate effect  of  that  work  ought  to  be. 


(3)   KEEPING  THE   CATALOGUE  ALIVE 

Another  article  in  this  same  series  carries  out  somewhat 
more  fully  the  idea  which  is  achieved  in  Mr.  Johnson's  previous 
article,  and  shows  how  some  concerns  have  undertaken  to  pre- 
serve the  news  value  of  their  catalogues  after  they  have  been 
put  into  the  hands  of  their  customers: 

*If  some  advertising  genius  could  invent  a  plan  whereby  a 
catalogue  would  be  placed  in  the  hands  of  the  prospect  at  the 
precise  moment  when  he  was  ready  to  buy,  said  genius  would 
be  fixed  for  the  rest  of  his  life.  His  only  embarrassment  would 
be  the  number  of  concerns  which  would  be  trying  to  outbid  one 
another  for  his  services.  But  that  particular  genius  has  not 
yet  appeared,  nor  is  he  likely  to.  So  the  problem  of  keeping 
the  catalogue  "alive"  in  the  hands  of  the  prospect  is  still  with  us. 

It  is  frequently  the  case  that  the  man  (or  the  catalogue) 
which  happens  to  arrive  on  the  spot  at  the  right  time,  walks  off 
with  the  order,  in  spite  of  the  fact  that  most  of  the  preliminary 
work  may  have  been  done  by  somebody  else.  For  example. 
Hank  Rogers  of  Hay  Corners  writes  in  to  the  A  &  B  Conipany 
for  an  incubator  catalogue.  He  has  a  mild  attack  of  the  chicken- 
raising  fever,  and  would  like  an  incubator — some  time.  He 
reads  the  catalogue  with  interest,  makes  sundry  calculations 
on  the  margin  with  a  stub-pencil,  and  concludes  to  wait  a  spell. 
At  intervals  he  receives  the  follow-up,  treats  it  respectfully, 
and  even  comments  upon  the  enterprise  of  the  concern.  From 
time  to  time  he  talks  the  incubator  question  over  with  Mrs. 
Hank,  and  maybe  six  months  or  a  year  later  makes  up  his  mind 
that  he  really  can  afford  to  invest.  Where's  that  catalogue? 
Never  mind;  here's  an  ad  of  the  C  &  D  Company  in  the  farm 
paper.  They  may  have  a  better  proposition.  It's  always  a 
good  plan  to  get  more  than  one  offer. 

Now  according  to  any  theory  of  abstraxit  justice,  A  &  B  should 
get  the  order.  That  concern  was  on  the  ground  first,  and  has 
done  most  of  the  work  of  educating  Hank  to  the  buying  point. 
But  the  order  goes  to  C  &  D  because  its  catalogue  arrives  at  the 
psychological  moment  when  Hank  is  ready  to  spend  his  money. 

That  is  a  very  simple  and  homely  illustration,  but  the  same 

*Pnnieri  Ink.  May  27, 1915.  p.  84. 


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thing  IS  happening  more  or  less  frequently  in  every  line  of  busi- 
ness. It  is  necessary  not  only  to  get  the  catalogue  into  the 
hands  of  the  prospect,  but  to  keep  it  "alive"  there  until  he  is 
ready  to  buy  the  goods.  He  may  have  put  it  away  ever  so  care- 
fully, but  if  he  has  forgotten  where  he  put  it,  it  is  as  good  as  dead. 
He  may  write  for  another  one,  and  he  may  not — probably  not. 
And  if  the  competing  catalogue  shows  up  just  at  this  opportune 
moment  the  chances  are  all  in  favor  of  its  getting  the  order. 

Let\s  suppose,  however,  that  the  catalogue  of  the  A  &  B 
Company  had  contained  some  very  practical  information  on  the 
feeding  of  chickens  to  mcrease  egg-production,  which  appealed 
to  Mrs.  Hank  as  something  worth  trying.  She  would  be  more 
than  likely  to  keep  the  catalogue  to  refer  to,  and  if  the  informa- 
tion was  practical  enough  and  vital  enough,  the  book  would  be 
in  more  or  less  regular  use.  That  would  be  an  example  of  the 
very  simplest  method  of  keeping  a  catalogue  alive — by  making 
it,  in  eflPect,  a  reference  book. 

Not  every  concern  can  do  it,  of  course,  and  sometimes  it  would 
be  unwise  to  attempt  it.    Yet  the  list  of  advertisers  who  have 
Informa-  ^^^^,  that  very  thing,  or  something  closely  approxi- 
tum  With-  mating  it,  would  be  a  long  one.     Reference  has  already 
out  *^Sbing  been  made  in  Printers'  Ink  to  such  books  as  the  Victor 
Talking  Machine  Company's  "  Book  of  the  Opera,"  the 
American  Radiator  Company's  "  Ideal  Fitter,"  the  Yale  &  Towne 
Manufacturing  Company's  "Locks  &  Hardware"   (primarily 
a  reference  book  for  architects),  and  the  Burroughs  Adding 
Max?hine  Company's  "Cost-keeping  Short  Cuts."    Those  are 
conspicuous  examples  of  catalogues  which  are  kept  ahve  for 
purposes  of  reference.     Almost  any  good  catalogue  of  technical 
products  will  afford  additional  illustration  in  its  pages  of  tabular 
matter  which  engineers  refer  to.     Probably  the  earliest  exam- 
ple of  the  catalogue  which  keeps  itself  ahve  in  this  way  is  the 
patent-medicine  almanac  which  tells  when  to  plant  turnip  seed, 
when  to  trim  the  rose  bushes,  etc.,  but  the  book  of  cookery  re- 
ceipts was  undoubtedly  a  pretty  close  second  in  point  of  time. 

One  thing  is  to  be  noticed,  however.    The  catalogue  which 

keeps  itself  ahve  in  this  way,  whether  it  is  the  humble  cook- 

Must  Meet  ^^<>ok  or  the  impressive  treatise  on  schools  of  design  in 

Need  of   hardware,  gives  information  which  does  not  require 

ManB^ore^  purchase  of  the  goods  before  it  can  be  used.    Just 

uya  ^  ]y£j.g  YL^^  could  follow  the  hypothetical  system  of 

feeding  her  chickens  if  she  never  bought  an  incubator,  so  the 


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architect  can  collect  ideas  from  the  Yale  &  Towne  book  without 
ever  specifying  Yale  hardware  in  a  single  instance.  The  cases 
aren't  parallel,  and  aren't  meant  to  be.  But  the  principle  is 
the  same.  In  order  to  keep  a  catalogue  alive  by  making  it  a 
book  of  reference  it  must  give  information  which  has  no  string 
attached  to  it.  It  must  meet  the  needs  of  the  prosf>ect  as  he  w, 
not  as  he  would  be  after  he  bought  a  bill  of  goods. 

A  recent  sjjeaker  before  the  Technical  Publicity  Association, 
an  architect,  singled  out  for  special  commendation  the  Red 
Book  of  the  United  States  Gypsum  Company,  Chicago.  He 
declared  that  the  book  was  not  only  preserved  in  the  oflSce  files, 
but  that  it  was  referred  to  whenever  the  questions  of  plastering 
or  fire-proof  construction  came  up.  Sometimes  the  company's 
product  is  specified,  sometimes  not,  but  the  book  is  in  requisition 
just  the  same.  With  regard  to  that  same  Red  Book,  W.  H. 
Price,  of  the  United  States  Gypsum  Company,  says : 

"Our  line  differs  materially  from  most  lines  in  the  fact  that 
the  average  consumer  or  builder  knows  little  about  construction 
or  comparative  values  of  materials.  So  it  resolves  itself  down 
practically  to  architects'  specifications,  at  least  on  large  build- 
ings, as  it  is  only  on  homes  or  smaller  structures  that  the  actual 
owner  interests  himself  to  a  point  where  investigations  are  made 
regarding  the  value  of  materials  entering  into  the  construction. 
The  architect  is  perhaps  a  more  diflScult  prospect  than  almost 
any  other  line,  as  he  is  technically  trained  and  is  always  *from 
Missouri.'  So  it  is  a  case  of  convincing  him,  and  to  do  this  re- 
quires both  the  right  kind  of  advertising  and  sales  eflForts. 

"In  this  respect  the  Red  Book  has  proved  a  very  successful 
piece  of  printed  matter.  It  was  sent  out  to  4,800  architects  and 
over  50  per  cent,  acknowledged  receipt  of  it.  Perhaps  90  per 
cent,  of  these  practically  said  it  was  just  what  they  wanted. 
Direct  information  from  our  various  salesmen  in  all  parts  of  the 
country  indicates  very  clearly  that  the  Red  Book  has  been  of 
material  assistance  to  them  in  interesting  the  architects  in  our 
materials.  I  consider  that  the  strength  of  the  Red  Book  lies  in 
the  fact  that  it  treats  in  a  semi-technical  way  the  products  we 
manufacture,  developing  the  points  of  advantage  briefly  and  not 
belaboring  the  architect  with  a  lot  of  customary  advertising 
and  sales  talk. 

"I  will  say  without  hesitation  that  we  have  been  able  to  make 
this  little  catalogue  do  considerably  more  of  the  work  which 
formerly  was  done  by  the  sales  force,  and  I  think  in  his  state- 


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ment  I  voice   the   sentiments  of   our  entire  selling  depart- 

The  Red  Book  mentioned  is  not  a  very  elaborate  affair  whpn 

the  architect.  Yet  some  of  the  latter  are  peax^efuUy  slumbering 
whitSlinl'^  '^'  bottom  shelf  of  his  sectional  booK 
miiih  ^W  if  P^If r,f>yered,  72.page,  4x6J  booklet  is  ver; 
Mna  wWi;  Srl^  illustrates  the  general  principle  that  the 
thmg  which  really  keeps  a  catalogue  ahve  isn't  so  much  what 
comes  out  of  the  printshop  as  what  went  into  the  "in  the 
first  place.  The  Red  Book,  for  all  its  modest  size  and  incon- 
KT^f^^^"^^"^'/'  pretty  sohd  "meat,"  and  must  have 

S2e  t  JTl^'fl!?  T'".  *^^  °^^^y  ^  ^^^  pretentious 
ann^r;..  1  J  ^^'"^S  th^t  keeps  it  alive  is  its  information 
on  proper  methods  of  lathmg,  on  the  mixing  of  plaster,  on  the 
p  acmg  of  metal  doors  in  fire-proof  walls,  etct  etc^  In  the  back 
?fwof  l^^^l^.*'^. several  pap  of  automatic  wall-measurement 
tables,  showmg  instantly  the  number  of  square  yards  of  wall 
d^W^f '"^"ir^  ^r^  dimensions.  It  dL  not^in  any  seni^ 
VP^^L!!?"'/^!^?^^!  ?^  ^''  particular  catalogue  that  it  is  a 
uctTit  Xrtles  "^  ^'^'^^'^on  book  for  the  use  of  the  prod- 
It  may  look  easy  enough  to  keep  a  catalogue  alive  in  this 

^ffi.'nU  f  r^'  ^^T  ^"'  ^^^T'*-  I«  ^^^'^  i^  i«  «^e  of  the  most 
difecult  things  to  do,  because  information  which  is  really  authori- 
tative, and  which  the  prospect  really  wants,  doesn't^  grow  in 
every  encyclopaedia,  and  can't  be  cribbed  out  of  text-books  or 
competitors  ca^logues  In  the  first  place,  it  is  necessa^  to 
hnd  out  what  kinds  of  information  are  wanted-not  merelv 
what  the  prospect  wai  be  mildly  interested  in  if  he  hasn'rany"^ 
te  t^'  "^"^  ^*  l^^  moment,  but  what  he  actually  has  need  for. 
Ihen  It  is  a  question  of  getting  that  information:  locating  it, 
ligging  It  out,  testmg  it     And  lastly,  it  must  be  arranged  in 

than  liZ  -^^  '*  r"  ^1  "^'^%.*^  ^^  '^  «^*  «f  ^^^  ^atflogue 

hi  v^^t^llr-^'"^^^^  ^^'^'  ^^^  \"^^^^^^  ^'^^  ^  «lide-rull  in 
his  vest  pocket  isn  t  gomg  to  search  the  back  pages  of  your 

catalogue  for  a  table  of  logarithms.  He  can  get  whit  he  wants 
\TZJT'^^  '^^^?^^*-  ^^  ^^^  ^^*  ^^'-^t^l^e  tables  aTin 
SuTw^^^^^^^^  "--"^^  P-e  that  the  cata- 

of  nm.^^I!  ^^  ""^^f^  "^T  ""J  K^P^"^  *^^  catalogue  in  the  minds 
of  prospects,  consistmg  chiefly  of  reminders  apart  from  the  cata- 


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logue  itself.  These  may  range  all  the  way  from  form  letters 
calling  attention  to  the  catalogue,  or  some  specific  page  in  it, 
to  supplemental  bulletins  issued  on  the  loose-leaf  principle. 
The  latter  plan  is  good — provided  the  prospect  will  take  the 
pains  to  file  the  supplemental  bulletins  with  the  main  body  of 
the  catalogue.  If  he  doesn't  file  his  bulletins,  he  is  likely  to 
think  his  catalogue  is  incomplete,  and  may  order  from  some 
other  source  if  he  happens  to  be  in  a  hurry. 

It  may  be  mentioned  right  here,  though  the  subject  will  be 

taken  up  in  more  detail  in  later  articles,  that  there  is  great 

Loose-leaf  diversity  of  opinion  with  regard  to  the  loose-leaf  sys- 

vcrsus     tem  of  issuing  catalogues.     As  a  method  of  keeping 

Bound    the  catalogue  alive  it  has  its  attractive  features  as 

Books  ^gjj  g^g  j^.g  (drawbacks.  The  General  Electric  Com- 
pany, for  example,  has  this  year  issued  its  first  supply  catalogue 
in  loose-leaf  form,  having  hitherto  relied  upon  the  system  of  issu- 
ing separate  bulletins.  J.  A.  Hills,  of  the  company's  publica- 
tion department,  says:  "This  book  is  a  radical  departure  from 
other  books  gotten  out  by  us.  Personally  I  am  open  to  con- 
viction as  to  whether  the  loose-section  or  loose-leaf  catalogue 
is  better  than  the  bound  catalogue.  In  the  former  the  human 
factor  is  involved  in  keeping  it  up  to  date,  and  in  the  latter  it 
becomes  out  of  date  quickly." 

On  the  other  hand,  the  Western  Electric  Company  has  gone 
back  to  the  bound-book  form  of  supply  catalogue.  In  the  hard- 
ware field,  Yale  &  Towne  cling  to  the  loose-leaf  form  of  dealer 
catalogue,  while  Sargent  &  Company  are  faithful  to  the  perma- 
nent binding.  In  short,  there  is  no  standard  of  practice  even 
among  concerns  in  the  same  field. 

A  number  of  concerns,  however,  have  more  or  less  satisfac- 
torily solved  the  problem  of  keeping  their  catalogue  alive  by  a 
skilful  use  of  the  house-organ  as  a  sort  of  supplemental  cata- 
logue. This  method  seems  particularly  valuable  in  cases  where 
the  product  is  suppHed  on  special  order  to  meet  certain  working 
conditions,  or  where  the  catalogue  is  intended  chiefly  for  "filling 
in"  orders  to  complete  the  dealer's  stock.  Thus  we  find  this 
use  of  the  house-organ  as  a  catalogue  supplement  in  such  widely 
separated  fields  as  the  manufacture  of  street  cars  and  wire  rope, 
and  the  retailing  of  shoes. 

The  J.  G.  Brill  Company,  of  Philadelphia,  for  example,  uses 
its  Brill  Magazine  with  the  avowed  purpose  of  keeping  its  cata- 
logues before  the  minds  of  the  street-railroad  fraternity.     Its 


H 


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I 
■f 


general  catalogues  on  cars,  trucks,  and  supplies  are  very  com- 
plete, and  are  usually  retained  in  the  files  of  the  operating  com- 
panies. That,  however,  is  not  enough.  The  types  of  cars  used 
under  different  operating  conditions  vary  greatly,  and  it  is  to 
the  company's  interest  not  merely  to  be  thought  of  when  new 
equipment  is  wanted,  but  to  be  thought  of  as  having  data  on  the 
precise  kind  of  equipment  which  is  needed.  The  Brill  Maga- 
zine furnishes  the  information  which  is  necessary  to  that  end, 
but  which  cannot  be  included  in  the  catalogue.  Semi-technical 
articles  are  run  dealing  with  traflSc  conditions  and  cars  in  various 
cities,  what  the  conditions  were  which  determined  the  type  of 
car  in  use,  figures  showing  operating  economies,  etc.  Usually 
there  are  a  few  pages  devoted  to  some  specialty,  such  as  a  signal 
gong  or  fender,  for  example,  which  is  also  featured  in  the  cata- 
logue which  reposes  in  the  file.  The  company  furnishes  a  binder 
each  year  in  advance,  for  copies  of  the  magazine,  and  states  that 
the  binders  are  quite  generally  used. 

There  are  numbers  of  products  which  are  bought  only  at  long 
intervals,  which  last  a  long  time,  and  which  have  no  external 
or  visible  features  which  can  be  used  as  talking  points  for  supe- 
riority. Wire  rope  is  one  such  commodity.  Much  depends 
upon  the  way  in  which  it  is  used,  and  when  a  man  wants  it 
he  wants  it  quickly,  for  a  special  purpose.  So  the  wire-rope 
manufacturer  wants  his  catalogue  to  be  alive  and  on  the  job 
when  the  need  for  the  product  arises. 

But  it  isn't  feasible  to  make  a  very  elaborate  catalogue  for 
wire  rope,  unless  one  is  prepared  to  write  a  complete  treatise 
When  the  ^^  ^^^  various  uses  of  the  product.     So  the  average 
Catalogue  wire-rope    catalogue    is    generally    what    would    be 
Is  a  Mere  called  a  "mere  price-list."     The  Broderick  &  Bascom 
£7^f    Rope   Company,   St.   Louis,  uses  its  monthly  pub- 
hcation  The  Yellow  Strand  as  supplementary  to  its 
catalogue,  or  price-list,  by  featuring  installations  of  aerial  tram- 
ways.    It  also  shows  how  the  product  is  used  in  logging, 
camps,  mines,  etc.,  much  of  which  may  be  regarded  as  logical 
catalogue  material,  but  which  perforce  is  not  included  in  the 
catalogue  itself.     The  idea  has  been  so  successful,  according  to 
Charles  E.  Bascom,  that  "since  we  started  publishing  it,  three 
other  wire-rope  manufacturers  have  taken  up  the  idea  with 
more  or  less  success." 

It  is  a  far  cry  from  wire  rope  to  shoes,  yet  we  find  somewhat  the 
same  proposition  in  operation  in  the  latter  field.     The  average 


shoe-manufacturer's  catalogue  has  a  peculiar  function  to  per- 
form. As  W.  G.  Dennison,  of  Rice  &  Hutchins,  Boston,  puts  it: 
"A  catalogue  in  a  wholesale  shoe  business  is  used  by  retailers 
principally  for  filling  in  their  stock,  and  is  rarely  if  ever  used  on 
an  initial  spring  or  fall  order.  Catalogues  are  therefore  made  as 
simple  as  possible,  and  contain  only  such  information  regarding 
the  shoes  as  is  necessary  to  the  retailer's  proper  understanding 
for  the  intelligent  writing  of  what  is  termed  sizing  orders." 

Indeed,  so  specific  are  these  catalogues,  that  the  Rice  &  Hut- 
chins  concern,  which  operates  nine  branch  distributing  houses, 
issues  a  separate  catalogue  for  each  branch.  "Each  of  these 
wholesale  houses,"  says  Mr.  Dennison,  "does  business  with  re- 
tailers in  surrounding  conditions  somewhat  different  from  those 
of  the  other  eight.  These  varying  conditions  make  it  necessary 
for  us  to  publish  nine  catalogues.  There  are  many  points  of 
similarity,  but  the  selection  of  shoes  is  made  with  sp)ecial  refer- 
ence to  the  kind  of  trade  served." 

From  the  foregoing  it  is  evident  that  the  shoe  catalogue  must 
be  kept  alive  if  the  dealer's  stock  is  to  be  maintained  at  the  high- 
water  mark.  And  the  monthly  publications  of  such  concerns 
as  Roberts,  Johnson  &  Rand,  Rice  &  Hutchins,  etc.,  come  in 
very  handily  here.  It  isn't  a  question  of  selling  the  line  to  the 
dealer — the  salesman  has  attended  to  that — ^but  it  is  a  problem 
of  getting  him  to  keep  up  his  stock,  and  of  keeping  the  cata- 
logue alive. 

In  conclusion,  the  problem  of  having  the  catalogue  in  the 
right  place  at  the  right  time,  and  seeing  to  it  that  the  prospect 
knows  it  is  there,  is  worth  considerable  study.  It  is  a  mistake 
to  expect  a  poor  book  to  keep  aUve,  and  even  the  best  book  needs 
following  up  from  time  to  time.  In  a  certain  sense  the  catalogue 
in  the  hands  of  a  prosp)ect  represents  an  investment,  and  it  is  up 
to  the  advertiser  to  make  it  pay. 

(4)  THE  CATALOGUE  AS  A  CREATOR  OF  PERSONALITY 

Closely  connected  with  the  field  of  direct-by-mail  advertising 
in  supplementing  their  sales  activities  is  the  fact  that  providing,  as 
it  does,  direct  contact  between  the  producer  of  the  catalogue 
and  the  probable  purchaser  of  the  goods,  the  catalogue  plays  an 
important  part  in  establishing  the  consumer's  idea  of  the  person- 
ality of  the  concern.  Robert  R.  Updegraff,  Manager  of  the 
publicity  of  Daniel  Low  &  Company  of  Salem,  Mass.,  in  an 


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182  DIRECT-BY-MAIL  AD\TRT1SING 

address  before  the  Toronto  Convention  of  the  Associated  Adver- 
tising Clubs  of  the  World,  explains  some  of  the  methods  his 
concern  has  employed  in  creating  an  atmosphere  of  sincerity  in 
building  up  their  mail-order  jewelry  business: 

♦As  a  mail-order  advertiser  I  am  concerned  with  the  atmos- 
phere of  sincerity,  which  bears  a  message  to  the  heart  rather 
than  to  the  intellect. 

To  make  my  idea  clearer  let  me  tell  you  about  a  certain  Y. 
M.  C.  A.  located  in  one  of  the  largest  cities  of  America.  This 
Y.  M.  C.  A.  was  built  at  an  expense  of  hundreds  of  thousands 
of  dollars.  It  is  a  wonderful  building.  Its  entrance  is  imposing. 
Its  parlors  are  rich.  Its  stairways  are  of  marble.  Its  walls 
are  hung  with  beautiful  pictures.  And  yet  socially  it  is  a 
"frost."  In  spite  of  the  hardest  kind  of  work  on  the  part  of 
its  secretaries,  social  life  is  diflacult  to  foster.  This  fact  was 
noted  very  soon  alter  the  building  was  opened.  The  officers 
set  themselves  to  the  task  of  finding  out  why.  They  looked 
around  at  the  handsome  office,  the  elegant  parlors,  the  marble 
stairways,  the  luxurious  leather  furniture,  the  rich  rugs.  And 
they  said:  "What  is  the  matter?" 

And  this  was  what  they  finally  discovered:  There  was  no 
heart  to  their  building.  There  was  no  one  spot  in  their  whole 
big  reception  floor  to  which  men  naturally  gravitated— no  spot 
that  drew  men  for  chats  and  stories.  What  that  Y.  M.  C.  A 
needed  was  a  big  fireplace  or  a  lounging  comer  or  something  to 
^vhich  a  man's  mind  would  naturally  turn  on  a  lonesome  evening. 
It  had  plenty  of  artistic  atmosphere,  but  no  soul — nothing  for  a 
man  to  catch  hold  of  and  say,  "I  like  the  atmosphere  of  this 
place.     It  is  homey.     I  feel  that  I  belong  here." 

When  I  first  heard  of  that  Y.  M.  C.  A.  it  came  to  me  Uke  a 
beam  of  light:  That  is  the  trouble  with  so  many  businesses, 
especially  those  which  must  depend  upon  the  catalogue  as  a 
salesman.  They  lack  a  soul,  or,  having  one,  they  fail  to  get  it 
across  to  those  whose  business  they  are  soliciting.  These  busi- 
nesses need  fireplaces  where  friendly  little  chats  may  be  held, 
and  where  the  heart  behind  the  business  may  be  revealed. 

It  is  hard  for  a  business  to  reveal  itself  and  not  lose  in  the 
revelation.     The  truth  of  that  statement  is  not  realized  until 


•Printers  Ink,  July  «,  1014.  p.  67. 


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one  tries  it.  Businesses  are  like  men,  for  they  are  merely  the 
enlarged  shadows  of  men.  Men  cannot  reveal  themselves  di- 
rectly. It  would  seem  egotistical  and  insincere.  It  is  largely 
in  his  attitude  toward  life,  people,  and  things  that  a  man  reveals 
his  true  nature.  Have  you  never  revised  your  first  judgment 
of  a  man  when  you  saw  him  stoop  and  pat  a  dog  on  the  head  or 
chuck  a  baby  under  the  chin  or  pick  a  flower?  It  was  his  atti- 
tude toward  something  else  which  revealed  the  true  man  to  you. 
It  is  just  so  of  businesses.  It  is  not  so  much  what  they  say  of 
themselves  that  impresses  us;  it  is  their  attitude  toward  their 
customers,  their  employees,  their  place  in  the  world,  their  mer- 
chandise or  manufacture. 

Right  here  comes  the  difference  between  true  atmosphere 
and  the  usual  spirit,  or  lack  of  spirit,  to  be  found  in  much  mail- 
order literature.  One  tells  you  bluntly,  almost  starkly,  of  it- 
self; the  other  opens  its  heart  and  allows  you  to  observe  and 
learn  for  yourself.  It  is  the  difference  between  an  illustration 
and  a  picture.  An  illustration  tells  its  whole  story  at  a  glance, 
just  as  many  catalogues  tell  their  whole  story  in  the  half-tones 
and  type  of  which  they  are  built.  A  picture  is  something  more 
subtle;  it  unfolds  itself  more  gradually.  There  is  a  story  be- 
hind it.  In  it  and  around  it  hovers  a  spirit — an  atmosphere — 
which  gives  it  an  identity. 

The  chairman  of  the  program  committee  has  asked  me  to 
tell  about  what  we  have  done  at  Daniel  Low's.  He  thinks  our 
catalogues  are  more  like  pictures  than  illustrations  because  there 
is  a  subtle  personality  to  them. 

That  is  what  we  have  tried  for.  What  success  we  have  had  in 
creating  an  atmosphere  has  been  due  largely  to  a  more  or  less 
unconscious  realization  that  business  souls  must  be  revealed 
just  like  the  souls  of  men — indirectly,  by  showing  their  attitude 
toward  things  and  people. 

We  started  out  to  make  oiur  catalogue  intimate  without  being 
impertinent.  We  wanted  people  to  feel  the  spirit  behind  our 
business.  It  takes  more  than  type,  half-tones,  paper,  ink,  and 
art  work  to  make  a  catalogue  with  a  soul.  It  takes,  first,  last, 
and  all  the  time  the  same  quality  that  we  recognize  in  men  as 
being  necessary — the  quality  of  sincerity. 

But  even  though  a  business  be  cradled  in  sincerity,  there  yet 
remains  the  task  of  getting  that  sincerity  across  the  gap  of 
mechanical  reproduction,  and  of  the  mail  service,  to  the  cus- 
tomer or  prospective  customer.    It  is  at  this  point  that  so  many 


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mail-order  catalogues  fall  short.  They  may  have  the  sincerity, 
the  soul,  but  many  of  them  have  found  no  other  way  to  express 
It  than  by  telling  how  sincere  they  are,  which  in  itself,  unless 
carefully  done,  sounds  like  egotism  and  even  insincerity. 

This  fact  we  were  confronted  with  in  putting  a  soul  into  the 
Daniel  Low  catalogue.  We  wanted  to  create  such  an  atmos- 
phere that  the  person  who  picked  up  one  of  our  catalogues  would 
immediately  feel  the  sincerity  of  the  house  behind  it,  and  would 
halfway  expect  to  meet  Mr.  Low  when  the  next  page  was 
turned. 

I  cannot  go  deeply  into  the  reason-whys  and  the  evolution  of 
our  ideas,  but  I  think  if  I  call  attention  to  a  few  touches  in  our 
hterature  one  will  quickly  grasp  the  thought.  We  do  not  claim 
to  have  mastered  the  art.  We  are  only  beginning.  Other 
houses  are  working  along  the  same  line.  Probably  the  most 
notable  example  is  the  series  of  advertisements  recently  run  by 
Montgomery  Ward  &  Co.,  of  Chicago. 

In  our  case  we  decided  that  it  would  be  a  good  thing  to  tell 
our  customers  the  story  of  our  business  since  its  beginning.  We 
felt  that  if  they  were  acquainted  with  our  past  they  would  have 
more  confidence  in  our  present  and  our  future.  So  we  devoted 
a  whole  page  in  our  Year  Book,  a  space  valued  at  hundreds  of 
dollars,  to  telling  the  story  of  Daniel  Low.  of  his  beginning  in  a 
httle  shop  m  Salem,  of  his  position  in  the  community,  of  his 
attitude  toward  his  neighbors  and  theirs  toward  him.  It  is  a 
story  of  sincerity  and  neighboriiness,  with  little  waving  of  ban- 
ners. But  it  put  a  touch  in  the  catalogue  which  made  the  new- 
est reader  feel  like  an  old  friend  of  the  family. 

Soon  after  this  it  came  to  us  that  we  ought  to  tell  our 
customers  what  we  were  striving  to  do.  We  looked  back  at 
what  we  had  been  striving  for  during  all  the  years  we  had  been 
m  business,  and  then  we  looked  ahead.  We  gathered  up  all  of 
these  strivings  and  ideals  into  two  brief  paragraphs  and  called 
it     Our  Aim.** 

Last  year  we  issued  a  booklet  of  "One  Hundred  Birthday 
Gifts.  We  wanted  in  that  book  to  show  how  we  felt  about 
bui:hdays,  so  we  wrote  a  httle  introduction  which  George  Gallup 
has  been  complimentary  enough  to  compliment.     It  is  as  follows : 


THE  BIRTHDAY   GIFT 


Back  of  all  birthdays  is  the  wonderful  fact  of  Birth,  Nature's  most  holy 
manifestation.  By  the  same  token,  back  of  all  gifts  b  the  beautiful  spirit  of 
Giving,  the  noblest  impulse  of  the  heart  of  man. 


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It  is  fitting,  therefore,  that  when  we  employ  the  art  of  Giving  to  conunem- 
orate  an  anniversary  of  the  birth  of  one  of  our  friends  or  dear  ones,  that  we 
select  as  the  token  of  our  friendship  or  love  some  gift  that  will  really  carry 
with  it  the  spirit  of  Giving  and  be  a  complete  and  lasting  symbol  of  the  gen- 
erous impulse  which  prompts  its  sending. 

Let  us,  then,  select  our  gifts  with  this  in  view.  Let  us  raise  the  standard 
of  gifts  and  maintain  the  dignity  of  Giving.  Let  us  give  gifts  that  must  be 
lived  up  to,  gifts  that  our  friends  and  loved  ones  can  keep  as  permanent  re- 
minders of  our  love  and  which  they  will  take  pride  in  saying  in  the  coming 
months  and  years:  "This  was  given  to  me  on  my  birthday." 

This  little  introduction  is  really  a  lay  sermon,  simple,  digni- 
fied, sincere.  It  illustrates  what  I  mean  by  revealing  one 
through  his  attitude  toward  some  outside  thing.  In  this  case 
it  was  birthdays.  Yet  how  better  could  a  business  house  con- 
vey an  idea  of  its  own  ideals  and  sincerity  in  177  words? 

Then,  one  day  it  came  to  us  that  ours  was  largely  a  house  of 
gifts,  and  we  had  a  desire  to  let  people  know  how  we  felt  about 
giving,  even  before  they  opened  our  catalogue.  We  wanted  a 
picture  which  should  symbolize  the  Spirit  of  Giving.  It  must 
be  a  sincere  picture.  It  must  be  Colonial,  and  truly  so.  It 
must  be  a  Salem  picture.  So  we  went  to  a  Salem  artist  whose 
reputation  for  Colonial  pictures  is  national,  and  we  told  him  we 
wanted  a  picture  that  would  tell  what  we  thought  of  giving. 
The  result  of  months  of  work  is  a  picture  which  hangs  in  our 
retail  store  in  Salem,  and  which  we  have  had  reproduced  in  rich 
brown  shades  on  our  Year  Book  cover.  It  represents  our  atti- 
tude toward  giving.  It  is  what  we  would  say  if  we  could  talk 
about  ourselves,  but,  being  a  picture,  it  tells  it  more  subtly  and 
with  greater  force.  It  lends  atmosphere  to  the  whole  Year 
Book. 

And  this  brings  me  back  to  the  other  kind  of  atmosphere — 
artistic  atmosphere.  This  picture,  "The  Gift,"  is  a  rare  com- 
bination of  artistic  atmosphere  and  the  atmosphere  of  sincerity. 
It  is  dignified  and  rich  enough  for  the  cover  of  a  jewelry  cata- 
logue, appealing  to  a  very  high  class  of  people,  because  it  is  a 
picture  and  not  an  illustration.  And  it  helps  the  artistic  at- 
mosphere of  the  book  and  of  our  business  because  it  is  good  art 
to  begin  with  and  it  is  executed  unusually  well. 

In  aU  of  our  work  we  seek  first  for  the  atmosphere  of  sincerity, 
which  speaks  to  the  heart,  and  then  for  the  atmosphere  of  the 
intellect.  We  have  only  begun  to  appreciate  the  possibilities 
of  this  indirect  method  of  creating  heart  atmosphere,  but  we  are 


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going  to  grope  on,  for  we  believe  it  will  operate  on  hidden  springs 
of  human  nature  that  will  bring  many  people  to  us  as  friends 
and  customers. 

(5)  SOME  SUGGESTIONS  FOR  CATALOGUE  CONSTRUCTION 

The  series  of  articles  by  Mr.  Johnson  before  referred  to  con- 
tains some  valuable  suggestions  about  how  to  use  market  data 
in  the  construction  of  a  catalogue.*  These  articles  are  valuable 
not  only  for  what  they  actually  contain,  but  for  the  suggestions 
which  any  one  with  imagination  can  get  out  of  them  for  meth- 
ods of  cutting  down  waste  in  selling  operations. 

A  somewhat  more  complicated  type  of  catalogue  problem  is 
that  worked  out  by  the  Plymouth  Fur  Company,  which  found 
difficulty  in  making  its  style  book  represent  its  entire  line,  and 
Mr.  Johnson  describes  the  method  which  they  employed  in  over- 
coming this  difficulty.  Its  chief  value  lies  in  the  fact  that  it 
suggests  how  almost  any  manufacturer  may  profit  by  enlisting 
the  customers  on  his  side  rather  than  attempting  to  tell  all  his 
story  himself. 

tThe  manufacturer  of  goods  which  are  subject  to  changes 
of  fashion,  such  as  men's  and  women's  clothing,  hats,  shoes,  and 
to  a  lesser  degree  jewehy  and  toilet  articles,  has  a  peculiar  cata- 
logue problem  of  his  own.  It  is  comparatively  easy  for  the 
manufacturer  of  goods  which  remain  the  same  from  year  to  year 
to  pick  out  certain  representative  items  for  illustration,  or  even 
to  lUustrate  the  whole  line.  His  catalogue  will  usually  serve 
a^well  a  year  hence  as  it  does  to-day,  and  if  it  does  not  prove  as 
effacient  as  was  expected,  no  great  harm  is  done,  for  the  goods 
will    keep. 

Not  so  with  the  manufacturer  of  fashionable  goods,  however. 
Ihe  goods  must  be  sold  while  they  are  in  style,  and  the  cata- 
logue must  do  Its  work  this  season,  for  next  year  it  is  likely  to 
be  hopelessly  out  of  date.  Furthermore,  the  problem  of  what 
to  lUustrate  is  troublesome.    He  may  make  forty  styles  of  gar- 

^Prinieri  Ink,  June,  18,  1914,  p.  63.  and  July  9.  1914,  p.  78. 
XPrifOera'  Ink,  August  6,  1914,  p.  22. 


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ments,  let  us  say.  Well  and  good;  he  can  illustrate  forty.  But 
each  garment  is  made  up  in  different  materials,  appealing  to  the 
tastes  of  different  customers.  Which  shall  he  choose  for  repre- 
sentation in  his  catalogue .f^     .     .     . 

A  catalogue  of  fur  garments — and  the  same  is  true  of  any 
catalogue  featurmg  fashionable  goods — must  do  two  things: 
first,  it  must  adequately  represent  the  line,  and  second,  it  must 
sell  the  goods  while  they  are  in  style.  For  six  years  the  com- 
pany issued  catalogues  in  the  famihar  "style  book"  form,  illus- 
trating a  dozen  or  so  of  the  "leaders"  in  the  most  popular  furs, 
and  stating  that  certain  of  these  garments  could  be  furnished  in 
any  fur  desired.  "We  discovered,  however,"  says  Mr.  Bard, 
"  that  the  imagination  of  women  did  not  stretch  to  any  fur  except 
those  that  were  actually  illustrated.  You  can  readily  see  that 
it  would  be  almost  impossible  to  show  each  style  in  every  pos- 
sible fur,  because  it  would  mean  an  enormous  increase  of  stock 
on  hand  without  any  definite  benefit.  This  matter  of  keeping 
down  stock  has  been  one  of  the  most  difficult  we  have  had  to 
face." 

So  last  year,  as  Mr.  Bard  told  at  Toronto,  the  company  dis- 
continued the  use  of  the  style  books,  and  substituted  for  them  a 
T/    Old   ^^^^^^  ^^  photographs  showing  the  goods  as  actually 
Twubh    ^^™-     It  was  not  only  possible  to  show  a  wider 
Recurs    variety  of  styles  than  could  be  shown  in  the  style  book, 
but  when  a  customer  expressed  a  preference  for  a  certain 
kind  of  fur,  on  a  certain  style  of  garment,  the  company  could 
send  her  an  assortment  of  photographs  which  would  almost 
exactly  fit  her  requirements.     But  here  again  the  old  trouble 
developed.     "In  making  up  my  list  of  photographs,"  says  Mr. 
Bard,  "I  selected  the  model  in  a  fur  which,  to  me,  looked  the 
best  and  would  give  the  best  results  in  the  illustration.     I  would, 
for  instance,  illustrate  a  model  in  mink,  and  then  when  a  cus- 
tomer wrote  in  for  ermine  models  we  would  include  this  one 
model  illustrated  in  mink,  but  which  would  look  equally  well  in 
ermine.     Our  experience  was,  however,  that  the  customer  could 
not,  or  at  least  would  not,  decide  on  models  which  were  not 
illustrated  in  the  exact  fur  she  was  considering.     The  chances 
were  about  ten  to  one  that  she  would  decide  on  a  model  which 
was  illustrated  in  ermine,  if  she  were  considering  that  fur." 

In  other  words,  the  company  still  found  it  difficult  to  give  the 
impression  of  the  complete  range  both  of  styles  and  materials. 
If  a  customer  wanted  an  ermine  garment,  she  would  consider 


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none  but  those  actually  illustrated  in  that  fur.  If  she  wanted 
a  particular  style  of  garment,  it  was  hard  to  make  her  imder- 
stand  that  it  could  be  had  in  any  other  fur  than  that  actually 
illustrated.  So  a  good  many  sales  were  lost  which  really  be- 
longed to  the  company,  because  the  customer  did  not  realize 
that  she  could  be  satisfied  with  the  assortment  offered. 

But  the  company  has  discovered  that  although  the  customer 
will  not  decide  upon  an  ermine  model  from  looking  at  an  illus- 
tration of  the  same  model  in  mink,  she  vdU  decide  from  a  rough 
pencil  sketch  of  the  model  which  does  not  show  any  fur  texture 
whatever!  That  discovery  was  originally  made  in  the  com- 
pany's retail  store,  where  buyers  were  met  face  to  face.  Much 
the  same  trouble  was  encountered,  until  the  expedient  was 
adopted  of  making  a  canvas  model  of  each  style  which  could  be 
displayed  when  the  company  had  no  stock  of  the  goods  in  the 
exact  fur  which  the  customer  happened  to  want.  The  customer 
who  wanted  ermine  would  not  decide  upon  looking  at  a  set 
which  happened  to  be  made  up  in  mink,  but  she  would  decide 
from  the  canvas  model  which  bore  no  resemblance  to  fur  at  all. 

"For  some  perfectly  mysterious  reason,"  says  Mr.  Bard,  "the 
canvas  model  or  the  black  and  white  sketch  is  more  convincing. 
I  have  thought  a  great  deal  over  the  matter,  and  have  come  to 
the  conclusion  that  the  reason  is  in  the  fact  that  the  customer's 
mind  is  not  distracted  by  a  different  kind  of  fur  which  she  must 
eliminate  while  she  is  considering  the  style." 

So  the  company  is  able  to  supplement  its  photographs  with 
rough  sketches  which,  it  is  asserted,  make  many  sales  which 
would  otherwise  be  impossible.  Perhaps  there  is  a  suggestion 
here  for  manufacturers  in  other  lines  who  find  that  an  undue 
proportion  of  sales  are  credited  to  those  goods  which  are  actually 
illustrated,  and  that  sales  are  being  lost  because  customers  can- 
not appreciate  from  a  single  illustration  that  the  goods  are  made 
up  in  a  wide  range  of  materials. 

Mr.  Bard  lays  great  emphasis  upon  the  importance  of  first- 
hand study  of  the  market.  He  not  only  makes  it  a  point  to 
study  the  attitude  of  the  customers  who  come  into  the  com- 
pany's store,  but  he  keeps  in  touch  with  former  mail-order  cus- 
tomers, writing  to  them  from  time  to  time  for  opinions  as  to  the 
best  policy  for  the  company  to  follow. 

For  example,  he  wrote  to  about  a  thousand  customers  who 
had  been  sold  through  the  style  books,  and  asked  them  what 
they  thought  about  the  new  plan  of  using  the  collection  of  photo- 


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489 


graphs  in  place  of  the  books.  "We  were  very  much  gratified," 
he  says,  "to  receive  from  these  customers  a  large  number  of 
letters  in  which  they  say  that  the  photographs  are  a  big  improve- 
ment."    So  the  same  plan  will  be  followed  next  year. 

The  value  of  ability  to  assume  the  viewpoint  of  the  recipient 
of  the  direct-mail  matter  is  well  brought  out  by  an  article  signed 
"by  an  architect"  which  tells  how  he  looks  upon  some  of  the 
direct-mail  material  he  has  been  receiving: 

*I  manage  an  architect's  office.  One  of  my  duties  is  to  open 
the  mail.  I  am  not  the  office  boy,  or  the  stenographer,  but  a 
man  with  technical  training  and  practical  experience,  so  I  can 
attend  to  most  of  the  letters  myself.  It  is  the  rule  in  most 
architects'  and  builders'  offices  of  any  size  to  have  some  such  man 
to  handle  the  routine  of  the  business,  leaving  the  employer  free 
to  handle  the  clients  and  supervise  the  designing  or  construc- 
tion in  a  broader  sense. 

After  I  have  read  and  answered  the  letters,  which  come  within 
my  duties,  and  there  are  few  which  do  not,  I  put  them,  together 
with  copies  of  my  answers  to  them,  on  my  employer's  desk  for 
him  to  read.  I  separate  the  mail  on  his  desk  in  two  piles:  one 
containing  business  letters,  the  other  advertising  matter.  It 
is  of  the  advertising  matter  that  I  wish  to  speak. 

First  come  those  letters  marked  "Personal,"  but  which  are 
a  crude  device  to  attract  attention.  A  sort  of  sixth  sense  tells 
me  whether  to  open  them  or  not.  I  am  a  little  quick  tempered, 
and  i>erhaps  several  worthy  firms  have  had  their  literature  con- 
signed to  the  waste-basket  for  lying  to  me,  or  rather  to  my  em- 
ployer. 

What  gets  on  my  employer's  desk  must  be  about  something 
new  in  the  building  line;  some  definite  information  about  an 
article  or  process.  He  is  a  busy  man,  my  employer,  and  he  can- 
not waste  time  reading  that  the  "American  Seal  Cement  Coat- 
ings" will  protect  concrete  and  cement  surfaces  from  disinte- 
gration; a  property  that  this  material  shares  in  common  with 
all  other  cement  coatings.  The  advertisement  is  about  lOj" 
by  16j",  nicely  printed  and  arranged,  but  what  does  it  tell  me? 
It  does  not  mention  price,  color,  method  of  application,  or  any 

^Printers'  Ink,  September  24,  1914.  p.  49. 


490 


i 


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•;  j. 


i| 


other  useful  thing,  so  far  as  I  am  concerned,  except  the  fact 
above  mentioned;  it  prevents  disintegration  and,  therefore 
makes  cement  waterproof.     I  found  this  in  a  waste-basket,' 
where  I  put  It  a  while  ago,  doing  duty  as  a  double  bottom,  and 
very  well,  too. 

Here  is  one  that  is  worth  while.  It  is  the  booklet  lately 
issued  by  the  .\merican  Sheet  &  Tin  Plate  Company,  explaining 
the  effect  of  copper  upon  steel,  for  roofing  tin.  The  cover  apt 
pealed  to  me  at  first.  The  absence  of  a  firm  name  on  it,  if 
nothing  else,  impeUed  me  to  look  into  the  book  to  see  who  is- 
su^  It.     Indolent  curiosity  is  one  of  the  strong  points  in  my 

Whoever  wrote  that  booklet  started  right  in  by  telling  the 
real  objection  to  tm  roofs  at  the  present  day,  their  lack  of  dura- 
bility. I  he  tendency  to  get  full  of  holes  which  most  American- 
made  tin  roofs  have  is  almost  beyond  belief,  and  this  booklet 
gave  the  real  reason  m  a  few  words,  all  on  the  first  page.  I 
turned  thejpage  over  and  kept  on  reading  until  I  had  finished  the 
book.  It  started  with  the  truth,  which  I  ah^ady  knew,  gave 
me  useful  information,  told  of  the  experiments  with  the  new 
material  called  "C.  B.  Open  Hearth,-  showed  photographs  of 
tests  with  other  materials  under  the  same  conditions,  tabulated 
the  results  of  the  tests,  gave  the  time-honored  arguments  in 
favor  of  tin,  and  especially  "C.  B.  Open  Hearth,"  as  a  roofing 
material,  and  best  of  all,  gave  specifications  for  the  use  of  the 
new  plates  and  data  on  costs  and  roof  loads.  This  went  on  the 
desk  with  a  special  note,  and  the  next  tin  roof  order  from  this 
I^ar  h  "^  ^^^"^^  ^^^^  ^  Tin  Plate  Company's  "C.  B.  Open 

Blotters  seeni  to  have  gone  out  of  style.  I  always  save  those 
which  blot  with  both  sides,  but  the  others  are  thrown  away. 
If  a  bottle  of  ink  spills  on  a  drawing,  I  can't  stop  to  see  if  a  blot- 
ter  IS  one-sided  or  not.  There  is  a  good  side  to  eveiything,  and 
a  blotter  should  have  two. 

Manufacturers  who  send  stamped,  self-addressed  envelopes 
to  us  are  takmg  a  long  chance.  If  the  matter  interests  me 
enough  to  make  me  thmk  it  worth  my  employer's  attention,  he 
wiU  probably  have  me  write  for  more  information;  if  not,  the 
stamp  goes  into  the  reserve  supply  for  the  office  boy  to  soak  off 
in  his  leisure  moments.  We  do  not  feel  under  obligations  to 
answer  an  advertisement  for  two  cents— or  two  dollars— and  as 
a  rule,  if  my  employer  really  wishes  information  from  a  manu- 


DIRECT-BY-MAIL  ADVERTISING 


491 


facturer,  he    is   willing   to   spend    his   o^ti   money    for    the 

stamp. 

We  don't  like  to  have  a  manufacturer  tell  us  "For  the  sake  of 
your  reputation,  you  should  specify  Flubdub's  Floor  Finish." 
How  thoughtful  Flubdub  is;  how  solicitous!  But  here  comes 
Bildad's  literature,  giving  the  same  advice,  which  no  sane  manu- 
facturer would  dare  tell  an  architect  personally.  Certainly,  we 
want  our  reputation  unblemished,  we  want  our  work  to  live 
after  we  have  gone,  but  we  don't  want  every  Flubdub  and  Bil- 
dad  giving  us  advice  about  it.  An  architect's  reputation  is  a 
sacred  thing  to  him,  and  an  advertiser  should  take  his  shoes  off 
and  leave  them  at  the  door  before  he  approaches  the  shrine. 

The  American  Rolling  Mill  Company  probably  spent  quite  a 
bit  of  money  in  telling  architects  that  "Ridge  rolls,  conductor 
pipes,  eaves,  troughs,  metal  lath,  and  window  frames  made  of 
quickly  rusting,  soon-to-b€-replaced,  mild  steel  sheets  never 
added  one  iota  to  any  architect's  good  name-^never  led  one  single 
person  to  pick  out  some  one  architect.    Quite  the  contrary." 

I  am  glad  to  know  that  "American  Ingot  u-on  will  do  it— has 
done  it— is  doing  it,"  but  what  good  does  it  do  me  or  my  em- 
ployer.'^ The  company  makes  good  stuff;  we  all  know  that,  but 
life,  in  this  business  at  least,  is  too  crowded  to  have  to  read  un- 
necessary advice.  The  company  asks  that  a  postcard,  which  is 
enclosed,  be  sent  it  for  further  information.  If  I  sent  all  the 
post  cards  of  this  kmd  that  I  was  asked  to,  the  office  would  be 
flooded  with  salesmen,  not  to  mention  the  time  it  would  take 
to  fill  out  a  card  for  an  article  in  which  I  am  not  deeply  inter- 
ested at  present,  however  good  it  may  be. 

In  this  office  "follow-up"  letters,  as  I  believe  advertismg 
men  call  them,  are  practically  useless.  We  are  glad  to  hear  about 
the  good  points  of  any  product,  but  letters  about  these  products, 
which  say  the  same  things  as  the  catalogues  we  have  on  file,  are 
works  of  supererogation,  and  are  as  commonly  saved  as  the  big 
word  is  used.  If  literature  is  worth  filing,  by  that  I  do  not  mean 
burying,  but  setting  aside  for  easy  reference,  the  articles  it  ad- 
vertises are  worth  using.  If  they  are  adapted  to  the  purpose 
and  appeal  to  us,  they  will  be  used. 

An  architect  cannot  create  jobs,  on  which  to  specify  materials, 
no  matter  how  good  they  are;  the  best  he  can  do  in  most  cases 
is  to  file  the  literature.  Then  when  the  job  comes  along  the 
material  in  the  file  on  the  particular  subject  in  question  will  be 
brought,  in  my  own  case,  to  my  employer  and  me.    We  will 


If, 


't\ 


49^ 


DIKECT-BY-MAIL  ADVERTISING 


look  through  it  for  catalogues  or  descriptions  of  the  article  which 
meet  our  requirements.  We  may  find  a  form  letter  mentioning 
m  a  general  way  just  about  the  thing  we  want,  but  there  is 
nothing  definite  in  it,  nothing  by  which  we  can  specify  the  arti- 
cle. Write  us  for  further  information,"  and  there  isn't  time 
to  wnte.  Our  loss,  of  course,  but  the  other  man's,  too,  for  we 
specify  what  some  clear-sighted  manufacturer  has  thouchtfullv 
described  for  us  m  tabloid  form. 

The  presence  in  our  files  of  clear,  concise  literature  with 
drawings,  prices,  methods  of  application,  advantages,  and  a 
Sj^ity  of  superfluous  selling  talk  is  a  most  efficient  salesman. 
When  we  ask  a  company  to  send  a  representative  to  talk  to  us 
we  expect  him  to  be  well  informed,  responsible,  and  able  to  talk 
business  How  much  advertising  literature  is  able  to  talk 
business?  It  s  aU  right  to  make  a  literary  social  call,  to  say 
How  do  y  do.?  *  but  could  the  caller  close  a  sale  if  the  need 
arose? 

A  while  ago  a  letter  came  which  made  me  mad.     I  wish  I  had 
saved  it  now,  so  that  I  could  quote  from  it  literally.     If  a  sales- 
man, a  total  stranger  to  you,  should  come  into  your  office  and 
say  to  you  m  a  jovial  manner  "HeUo  there,  Bill,  you  darned  old 
fool!    he  would  probably  get  your  undivided  attention,  and  be 
lucky  if  that  was  all  he  got.     This  letter  started  out,  as  nearly 
as  I  can  remember,  with  the  words  "All  architects  are  fools. 
Ihere,  I  guess  that  made  you  sit  up,  didn't  it?"  and  then  it  went 
on  to  talk  about  the  product  it  was  advertising.     The  rest  of 
the  letter  w^  about  as  useful  as  the  average  form  letter,  but  I 
thought  the  first  hne  would  interest  my  employer,  so  I  put  the 
letter  on  {us  desk      "Say,"  he  said,  after  reading  the  opening 
sentence,    this  feUow  is  pretty  fresh,  isn't  he?"  and  he  tore  the 
letter  up  without  readmg  the  rest  of  it.     I  think  he  was  kind  of 
fresh  myself. 

Dignity  is  a  valuable  asset,  not  rhetorical  dignity,  but  the 
dignity  of  truth,  undecorated  and  stated  without  undue  em- 
phasis There  are  so  many  articles  that  are  perfect,  most  effi- 
cient, the  best  made,  that  I  sometimes  long  for  an  article  which 
Its  manufacturers  will  admit  is  not  beyond  compare.  Take 
ventilators,  for  mstance;  the  Royal  ventilator  is  guaranteed  to 
exhaust  more  au-  per  minute  than  any  other  ventilator.  The 
makers  produce  a  test  to  prove  it.  The  Kernchen  ventilator 
wm  exhaust,  so  the  literature  says,  100  to  300  per  cent,  more  air 
than  any  other  ventilator,  and  its  makers  produce  a  test  to  prove 


DIRECT-BY-MAIL  ADVERTISING 


40S 


it.  If  the  ventilators  could  remove  the  hot  air  from  each  other's 
literature,  or  even  from  their  own,  their  efficiency  would  be  re- 
markable. All  of  which  has  something  to  do  with  the  first  sen- 
tence in  this  paragraph. 

If  companies  insist  on  sending  us  reminders  of  the  fact  that 
they  are  in  business,  I  wish  they  would  print  them  on  the  backs 
of  half-tone  cuts  of  recently  erected  buildings.  Illustrations 
are  always  welcome  in  the  office,  if  they  are  clear  photographs, 
taken  from  a  good  position.  We  always  save  them  for  future 
reference,  and  no  matter  how  often  the  catalogue  file  is  cleaned 
of  old  literature,  the  picture  file  is  undisturbed.  I  have  known 
advertising  on  a  picture  ten  years  old  to  get  in  its  good  work 
when  the  picture  was  being  used. 

Advertisers  should  remember  that  my  curiosity  is  really  pas- 
sive rather  than  active;  that  they  have  to  show  me  before  I  will 
show  my  employer;  that,  although  the  burden  of  proof  lies  with 
the  advertiser,  he  need  not  prove  his  point  several  times,  in 
divers  letters  and  pamphlets,  after  he  has  once  given  me  the 
complete  information. 

I  want  all  the  information  the  manufacturer  can  give  me  that 
will  assist  in  comparing  his  product  with  others  of  the  same  kind, 
and  enough  to  specify  his  goods  intelligently,  without  having 
to  write  to  him  for  details,  which  should  have  been  at  hand;  but 
that  is  all.  Let  him  write  his  "follow-up"  letters  and  htera- 
ture  by  means  of  advertisements  in  some  good  architectural 
publication,  and  he  will  save  money  and  gain  in  sales,  so  far  as 
our  office  is  concerned. 


f 


TRADEMARKS  AND  BRANDS 


495 


I 


CHAPTER  XIII 


TRADEMARKS   AND   BRANDS 


( 


TRADEMARKS  derive  their  value  from  the  opinion  the 
public  has  of  the  goods  on  which  they  are  placed. 
The  American  Tobacco  Company  enters  its  brands, 
trademarks,  good  will,  and  patents  among  its  assets  at  a  valua- 
tion of  $54,000,000,  and  other  successful  advertisers  put  a  high 
value  on  these  "commercial  by-products"  which  are  so  im- 
portant a  part  of  their  reputation  with  the  public.  A  recent 
report  of  the  National  Biscuit  Company  says:  "While  plants 
inevitably  depreciate,  trademarks,  trade  names,  and  trade  dress 
of  packages,  when  sustained  by  quality  and  service,  must 
inevitably  increase  in  value."  And  the  most  important  clause 
in  this  statement  is  "when  sustained  by  quality  and  service." 
A  trademarked  product  is  Hke  a  marked  man,  it  may  be  easily 
avoided  if  the  public  disapproves  of  it,  and  no  amount  of 
artificial  stimulation  of  demand  will  alter  this  for  long  at  a 
time. 

The  Quoin  Club,  which  is  made  up  of  periodical  publishers, 
has  recently  begun  a  series  of  advertisements  to  the  consumer 
calling  attention  to  some  of  the  ways  in  which  the  purchase  of 
merchandise  identified  by  trademark  or  otherwise  may  be  used 
by  the  consumer  to  his  own  advantage.  This  campaign  had 
the  following  chief  points: 

*A  series  of  advertisements  has  been  prepared  which  began 
to  appear  in  the  May  periodicals.  Seven  advertisements  are 
now  ready.  They  will  be  printed  as  a  series  by  each  publica- 
tion, but  the  entire  series  will  be  printed    each  month  in 

^Advertising  and  Selling,  May,  1915,  p.  24. 

404 


various  periodicals.  They  will  be  set  in  one  general  style  of 
type  and  border  and  each  advertisement  will  feature  at  its 
top  a  familiar  trademark  (different  trademarks  in  the  various 
publications),  although  no  reference  will  be  made  to  any  par- 
ticular trademark  in  the  copy,  the  idea  being  to  play  up  the 
"reason  why"  of  trademarks  as  a  whole.  The  general  drift 
of  the  argument  will  be  shown  by  these  parts  of  para- 
graphs : 

"The  manufacturer  who  brands  his  goods  and  advertises 
them  nationally  is  so  sure  of  their  quality  that  he  is  willing  to 
stand  the  full  force  of  possible  complaints. 

"It  induces  manufacturers  of  similar  trademarked  goods 
to  compete  in  quality  and  service,  as  that  is  the  only  way 
they  can  wm— by  making  their  trademark  stand  for  some- 
thmg. 

"A  great  factor  in  the  cost  of  goods  is  the  time  it  takes  to 
move  them.  Advertising  and  trademarks,  working  together, 
are  the  most  efficient  movers  of  goods — consequently  the  great- 
est reducers  of  selling  cost. 

"There  can  be  no  monopoly  in  advertising,  therefore  to-day 
one  manufacturer  stands  as  good  a  chance  as  another  to  win 
favor  for  his  trademark,  so  long  as  he  backs  up  his  advertising 
and  his  trademark  with  quaHty.  And  the  trademark  makes 
the  consumer  the  deciding  factor  in  all  purchases,  because  it 
enables  him  to  identify  the  goods. 

"The  trademark  makes  it  as  easy  to  avoid  the  unsatisfactory 
as  to  repurchase  the  satisfactory.  Therefore,  the  presumption 
of  excellence  is  always  in  favor  of  the  trademarked,  nationally 
advertised  goods  as  against  the  unbranded  article  of  uncertam 
origin. 

"The  purpose  of  national  advertising  is  to  make  widely 
known  the  names  and  trademarks  of  goods  upon  which  the 
manufacturer  places  this  stamp  of  his  responsibility— this  sign 
of  his  willingness  to  be  judged  by  the  quality  of  his  goods.  The 
trademark  identifies  the  goods— advertising  makes  them  known. 
1  he  two  things  work  together  automatically  for  higher  standards 
of  quality. 

**It  is  safer  and  cheaper  to  buy  the  well-known  advertised 
article  put  up  by  the  manufacturer  with  his  name  and  trademark 
on  the  package.  Safer,  because  the  manufacturer  who  puts 
his  name  on  his  goods  puts  his  future  into  your  hands.  He 
must  put  quaUty  into  his  goods  or  lose  your  trade,  because  you 


I 


400 


TKADEMAKKS  AND  BRANDS 


1 


1 1 
* " 


d\ 


n^rT.  '^^""a^^-  •*'*  ^\-  ^^^P^''  »^"^  advertising 
reduces  the  producing  and  selling  costs  of  manufacturers  by 
enormously  increasing  their  output." 
Each  advertisement  closes  with  this  paragraph- 
Irademarks  and  national  advertising  are  the  two  ereatest 
public  servants  in  business  to^lay.     Their  whole  teXjs 

LTbilSg'them  ••  ^^'''''^"  *''^'°'  '^^"^  '^-'•'^  P»- 

There  is  material  available  for  a  consideration  of  many 
aspects  of  the  trademark.    The  principles  underlying  the  se- 
lection of  a  trademark  have  been  discussed  with  some  detail 
and  there  have  been  numerous  articles  describing  the  technique 
of  trademark  registry  and  protection.    The  limits  of  space 
however,  oblige  us  to  leave  these  points  out  of  consideration 
and  to  confine  our  attention  to  the  developments  of  the  past 
year  m  the  trademark  field  which  have  to  do  with  the  establish- 
ment  of  this  device  as  a  factor  in  the  development  of  modem 
methods  of  selling  merchandise.    These  points  we  shall  con- 
sider in  two  main  groups:  (1)  The  trademark  and  the  consumer 
(«)  Some  of  the  problems  of  competition  between  trademarks 
and  private  brands. 

(1)  TRADEMARKS  AND  THE  CONSUMER 

In  Chapter  I  we  referred  to  the  circular  of  the  Mayor's 
Committee  m  New  York  against  paxikage  goods.  This  was  a 
direct  attack  on  package  goods,  and  through  it  on  trademarks, 
advertising,  and  the  whole  process  by  which  merchandise  is 
Identified  for  the  guidance  of  the  consumer.  We  have  examined 
some  of  the  elements  of  the  process  of  selhng  goods  by  advertis- 
ing  and  we  have  exammed  some  of  the  problems  connected 
with  advertising  to  which  the  leaders  in  this  modem  method 
of  selling  are  addressing  themselves.  We  are  now  in  a 
position,  therefore,  to  understand  something  of  the  point  of 
view  of  some  of  those  friends  of  trademarked  goods  who 
undertook  to  reply  to  the  Mayor's  Committee.    The  foUow- 


TRADEMARKS  AND  BRANDS 


[407 


ing  are  selected  from  a  number  collected  by  Printers*  Ink  at 
the  time: 

THE   PACKAGE  SYSTEM  TOO   WELL   ESTABLISHED  TO   BE 

OVERTHROWN 

(By  Norah  Johnson   Barbour,   Johnson   Educator   Food   Company, 

Boston) : 

♦The  subject  of  package  goods  has  been  much  discussed,  and 
the  fact  that  they  do  cost  more  is  no  secret  to  any  one,  and  no 
manufacturer  for  one  instant  pretends  to  say  that  he  can 
produce  package  goods  for  less  money  than  he  can  produce 
bulk  goods. 

The  circular  which  New  York  City's  official  Committee  on 
Food  Supply  has  distributed  through  the  schools,  advising 
heads  of  families  to  purchase  goods  in  bulk,  may  have  its  effect 
on  some  people.  But  the  custom  of  furnishing  the  consumer 
manufactured  products  in  a  clean  and  sanitary  condition  is  one 
of  advancement,  and  all  the  circulars  in  creation  are  not  going 
to  overthrow  this  well-established  system  of  conveying  manu- 
factured goods  to  the  housewife. 

In  reply  to  that  first  statement,  that  the  package  looks  pretty 
and  appeals  to  the  eye,  I  would  say  that  this  is  no  doubt  tme. 
I  cannpt  agree,  however,  that  it  makes  the  food  seem  more 
appetizing,  except  as  it  assures  the  purchaser  that  the  contents 
have  not  been  subject  to  the  contamination  of  the  atmosphere 
of  the  grocery  store. 

In  regard  to  the  second  statement,  I  am  sure  that  for  sanitary 
reasons  an  air-tight  and  dust-proof  package  is  appreciated  by 
thinking  people,  and  they  are  willing  to  pay  a  little  more. 
Personally  I  have  never  found  in  the  open  market  cereal  products 
m  bulk  that  were  the  same  quality  as  those  which  I  have  pur- 
chased in  packages. 

The  plan  of  buying  cereals  in  bulk  and  cooking  them  in  a 
fireless  cooker  is  all  right  for  a  certain  class  of  people,  but  there 
is  a  class  of  people  who  cannot  afford  a  fireless  cooker.  A  larger 
majority  of  the  people  who  can  afford  a  fireless  cooker  are  will- 
ing to  pay  the  fractional  increase  on  the  cost  of  their  product  in 
order  to  get  it  clean  and  sanitary. 

In  regard  to  the  cracker  question,  this  is,  of  course,  exceed- 

*Pnnt€r8*  Ink,  February  4,  1915.  p.  12. 


498 


TRADEMARKS  AND  BRANDS 


TRADEMARKS  AND  BRANDS 


499 


I 


ingly  interesting  to  us.  In  our  own  enterprise  we  offer  the 
customer  goods  in  packages  or  in  bulk.  There  is  much  saving 
in  package  goods  because  there  is  nothing  broken.  Crackers 
packed  directly  from  the  oven  are  all  selected.  You  pay  for 
nothing  but  perfect  goods  in  perfect  condition. 

Reference  is  made  to  ginger-snaps.  What  kind  of  ginger-snaps 
can  be  bought  loose  fo'-  ten  cents?  What  class  of  people  are 
interested  in  them.^  The  people  who  are  interested  in  ginger- 
snaps  at  10  cents  a  pound  have  been  buying  them  in  bulk  ever 
smce  ginger-snaps  were  placed  on  the  market.  All  the  large 
dealers  put  out  these  goods  in  boxes  with  glass  covers. 

The  bacon  situation  is  one  that  is  intensely  interesting.  Per- 
sonally I  use  the  most  extravagant  kind  of  bacon  because  I  can- 
not find  anything  to  compare  with  it  in  bulk.  The  method  of 
slicing  bacon  is  such  as  to  bring  the  product  to  you  in  perfect 
condition  and  there  is  absolutely  no  waste. 

Bulk  macaroni  is  always  fly-specked  and  dirty.     I  never  saw 

any  that  was  clean.    As  for  the  comparison  of  canned  fruit  and 

dried   fruit,   there   is   no   comparison.     We   will   all 

anl^^'  admit  that  the  dried  peach  and  the  dried  apricot  are 

taru  Can-  g^^»  ^^^  ^^^7  ^o  not  take  the  place  of  the  canned 

nderatim  fruit.     The  same  is  true  of  peas  and  beans.    Almost 

every  household  uses  peas  and  beans  of  the  dried 

variety  for  purees,  but  they  do  not  take  the  place  of  the  canned 

vegetables. 

As  to  the  famous  Boston  baked  beans,  which  are  so  well 
known  in  New  England,  the  price  set  by  Mayor  MitcheFs 
commission  for  baked  beans  sufficient  for  eight  people  is  very 
low.  I  belong  to  a  good  New  England  family,  and  we  cannot 
produce  the  raw  material  for  a  good  pot  of  baked  beans  for  less 
than  28  cents.  Then  there  is  the  scientific  handling,  the  fuel, 
and  energy.  It  requires  a  whole  day*s  attention  to  produce  a 
good  pot  of  New  England  baked  beans.  I  am  afraid  Mr. 
Perkins  himself  would  not  be  satisfied  with  the  results  of  15 
cents'  worth  of  raw  materials  to  serve  eight  people. 

I  do  not  agree  with  him  that  it  will  pay  us  to  "break  ourselves, 
of  the  package  habit."  I  will  agree  that  some  things  can  be 
bought  both  in  packages  and  in  bulk  of  the  same  quality,  and  by 
careful  thought  on  the  part  of  the  housewife  living  expense  may 
be  materially  cut  down,  but  it  will  never  be  done  I  am  quite 
sure,  by  giving  up  absolutely  all  package  goods. 
A  large  majority  of  the  mothers  who  wiU  be  at  all  stirred  by 


this  circular  are  already  using  the  dusty  and  specked  foods 
which  are  purchased  in  the  ordinary  New  York  grocery  store  in 
bulk.  The  thinking  public  knows  that  if  they  purchase  a  pound 
of  bulk  goods  it  has  been  handled  at  least  by  the  man  in  the 
store,  and  I  am  sure  you  will  agree  w  ith  me  that  in  those  shops 
in  New  York  where  bulk  goods  are  sold  so  extensively,  more 
than  one  hand  touches  the  food  before  it  is  put  into  the  paper 
bag  for  the  consumer. 

In  regard  to  dealers  watching  all  the  time  to  find  out  what 
the  public  wants,  they  do  this  as  far  as  they  can  and  make  the 
most  profit  for  themselves.  The  progressive  grocer  of  to-day 
has  adopted  the  package  system,  as  it  is  a  great  saving  of  labor 
to  him  and  he  can  handle  much  larger  amounts  in  the  same 
space.  He  does  not  want  to  go  back  to  the  bulk  custom,  and, 
if  he  did,  all  creation  would  not  follow  him.    ..     .     . 

A  pound  of  crackers  in  a  paper  bag,  in  my  opinion,  is  not  a 
desirable  article  of  food  to  go  into  any  household.  Tin  is  the 
ideal  container,  and,  as  we  know,  tin  is  expensive  as  compared 
with  pasteboard  or  paper,  but  we  do  get  something  for  that 
expenditure.    There  is  no  question  about  it.     .     .     . 

IDENTIFICATION  IMPORTANT  IF  CONSUMER  IS  TO  SECURE 

GOOD  QUALITY 

(By  Earnest  Elmo  Calkins,  of  Calkms  &  Holden,  New  York) : 

[Editohial  Note. — The  following  letter  was  addressed  to  George  W.  PerkiiM, 
fJhairman  of  Mayor  Mitchel's  Food  Supply  Gjmmittee.J 

I  appreciate  the  efforts  of  your  committee  to  reduce  the  cost 
of  livmg  to  the  people  of  this  city,  and  I  feel  that  there  is  a  great 
deal  of  merit  in  the  suggestions  of  this  circular. 

It  seems  only  right  to  me,  however,  to  point  out  that  the 
primary  idea  of  putting  food  in  packages  was  not  to  make  a 
larger  profit  on  them,  nor  was  it  entirely,  although  partly,  to 
protect  the  food  from  contamination.  A  very  large  factor  in 
this  matter  is  the  identification  of  the  foods,  and  this  identifica- 
tion is  very  important  if  the  purchaser  of  food  is  to  obtain  good 
food  for  his  money. 

To  illustrate  my  point  I  will  pick  out  one  item  which  you 
mention,  as  I  happen  to  know  a  good  deal  about  it.  That  item 
is  vinegar. 

You  must  know  that  there  are  a  great  many  grades  of  vinegar 


500 


TRADEMARKS  AND  BRANDS 


I 


T 


made,  and  that  the  cheaper  grades  are  inconceivably  bad. 
J5ulk  vinegar  (I  am  speaking  now  of  cider  vinegar)  is  made 
almost  altogether  from  spent  apples— that  is,  apples  which  have 
been  pressed  originaUy  to  produce  cider.  The  fragments  are 
agam  pressed  and  the  product  made  into  vinegar— not  by  the 
slow  process  of  aging  and  mellowing,  but  by  adding  various 
chemicals  and  acids  (frequently  wood  alcohol)  to  hasten  the 
sounng  of  the  vinegar.  This  vinegar  in  bulk  is  drawn  from  the 
barrel  into  containers  brought  by  the  customers,  or  into  empty 
whisky  bottles,  and  sold.  It  is  a  raw,  sour,  unpleasant  liquid 
and  bears  no  more  resemblance  to  real,  pure  vinegar,  properly 
aged  and  mellowed,  than  a  whisky  fresh  from  the  still  bears  to  a 
whisky  ripened  for  ten  years  in  wood. 

A  manufacturer  who  makes  a  cider  vinegar  from  the  first 
pressing  of  the  apples,  who  matures  it  in  wood  from  twelve  to 
eighteen  months  and  does  everything  to  enhance  his  product 
and  make  it  an  appetizmg  and  wholesome  thing,  finds  when  he 
»ells  this  vinegar  in  bulk— that  is,  by  the  barrel— that  the 
dealer  takes  the  empty  barrel,  fills  it  with  an  inferior  and  much 
cheaper  article,  and  sells  it  under  the  name  of  the  manufacturer 
of  the  good  article. 

This  happens  in  every  line  of  food  manufactured.  Only  by 
M  ling  the  ^onegar  and  other  articles  in  containers  which  are 
tilled  at  the  factory  and  which  go  sealed  and  intact  to  the  con- 
sumer can  this  be  prevented. 

The  reason  that  such  vinegar  costs  more  than  the  bulk 
ymegar  is  not  entirely  due  to  the  package,  although,  of  course, 
the  cost  of  the  package  must  be  considered,  but  it  is  more  largely 
due  to  the  fact  that  it  is  a  much  better  vinegar  and  is  the  only 
vinegar  fit  for  human  consumption. 


HOME  PREPARATION  CANNOT  EQUAL  FACTORY  PROCESSES 

(By  Truman  A.  DeWeese,  Director  of  Publicity,  the  Shredded  Wheat 

Company,  Niagara  Falls,  N.  Y.) : 

To  attempt  to  prejudice  the  consuming  public  against  package 
foods  through  the  medium  of  the  public  schools  is  certainly 
going  beyond  the  legitimate  prerogatives  of  city  government. 
Ihe  right  of  Mayor  MitcheFs  Committee  on  Food  Supplies  to 
injure  or  destroy  any  legitimate  industry  through  the  medium 
of  pubUc  schools  is  certainly  open  to  question.    Package  foods 


TRADEMARKS  AND  BRANDS 


aoi 


represent  a  long  stride  in  the  direction  of  pure  food  and  away 
from  the  unsanitary  methods  of  other  days.  A  food  that  is 
packed  in  sealed,  germ-proof  packages  is  certainly  cleaner,  purer, 
and  freer  from  dirt  and  the  ordinary  contamination  incident  to 
transit  than  the  old  style  of  bulk  foods  which  were  sold  from 
barrels  and  boxes,  which  were  frequently  infested  by  mice,  and 
in  which  the  store  cat  quite  often  reposed  at  night. 

So  much  for  the  package  feature  which  secures  cleanliness 
and  purity  and  sanitation.  Now,  as  to  the  process  of  manu- 
facture. It  is  not  what  we  eat,  but  what  we  digest,  that 
nourishes  the  human  body.  The  digestibility  of  a  focS  product 
depends  largely  upon  the  process  of  manufacture  and  how  it  is 
prepared  for  the  human  stomach.  It  is  easy  enough  to  tell  the 
housewife  that  she  can  prepare  cereals  in  her  own  home  just 
as  well  as  they  can  be  prepared  in  a. factory.  The  absurdity 
of  this  statement,  however,  will  be  quickly  apparent  to  men 
who  have  any  knowledge  of  the  manufacturing  business  and 
who  know  something  about  the  equipment  that  is  required  to  pre- 
pare a  cereal  food  in  digestible  form.  It  is  not  possible  to  equip 
the  average  kitchen  with  the  appurtenances  that  will  enable  a 
housewife  to  prepare  cereals  in  a  sanitary  and  digestible  form. 

So  far  as  our  product  is  concerned,  the  circular  does  not 
touch  us  at  any  point.  It  is  not  possible  to  make  Shredded 
Wheat  Biscuit  in  any  home.  The  virtue  of  our  product  is  in 
the  process,  which  consists  of  steam-cooking,  shredding,  and 
baking  the  whole  wheat  under  conditions  of  perfect  sanitation 
and  cleanliness  which  do  not  obtain  in  the  average  kitchen.  We 
claim  that  through  this  process  the  whole  wheat  grain,  with  all 
the  rich,  body-building  material  which  it  contains,  is  more 
thoroughly  digestible  in  the  human  stomach  and  that  every 
particle  of  the  grain  is  converted  into  healthy  tissue,  bone,  and 
brain.  Two  of  these  biscuits  with  a  little  hot  milk  make  a 
complete,  perfect  meal,  supplymg  all  the  strength-giving  ma- 
terial that  is  needed  for  a  half-day's  work  or  study,  at  a  total 
cost  of  not  over  three  or  four  cents.  Being  ready-cooked  and 
ready  to  serve,  the  housewife  wastes  no  time  and  no  fuel  in 
their  preparation  and  is  not  required  to  invest  in  the  machmery 
which  makes  this  process  possible. 

Of  course,  the  movement  to  educate  poor  people  on  the  food 
value  of  cooked  cereals,  vegetables,  and  fruits  is&  laudable  one, 
and  deserves  encouragement  and  support.  Instead  of  educating 
the  public  away  from  package  goods,  however,  I  think  the  time 


«J\/<V 


TRADEi\L\IlKS  AND  BRANDS 


is  coming  when  the  public  demand  for  cleanliness  and  purity 
will  result  in  the  enactment  of  laws  forbidding  the  sale  of  such 
foods  as  cereals,  crackers,  peas,  and  beans  in  bulk.  The  sale  of 
such  foods  in  bulk  with  all  the  dirt,  disease  germs,  and  foreign 
material  which  they  contain  is  fraught  with  grave  danger  to 
the  public  health. 

PUBUC   WILL  NOT   GO  BACK  TO  OLD-TIME   HABITS 

(From  B.  Fischer  &  Co.,   Importers  of  Tea,  CoflFee,   Spice,   Rice, 

New  York) : 

'ii' 

We  thank  you  for  calling  our  attention  to  this  circular,  and, 
of  course,  we  are  not  in  accord  with  Mr.  Perkins'  or  the  com- 
mittee's theory  of  the  package-food  situation.  We,  further- 
more, do  not  believe  that  the  public,  unless  a  tremendous 
amount  of  pressure  is  brought  to  bear  upon  them,  will  go  back 
to  the  old-time  way  of  demanding  foods  in  bulk  in  place  of 
packages,  and  for  that  reason  we  do  not  think  it  is  going  to 
interfere  with  the  sale  of  our  goods. 

Take,  for  instance,  coffee.  It  is  a  recognized  fact  that  in 
order  to  preserve  the  true  flavor  and  freshness  of  coffee  it  should 
be  packed  in  a  hermetically  sealed  can.  Of  course,  there  is  no 
denying  the  fact  that  an  ordinary  bulk  coffee  can  be  bought  at 
lower  prices,  and  this  is  a  condition,  we  think,  that  will  always 
exist. 

In  regard  to  rice,  our  goods,  which  are  automatically  packed, 
cost  so  little  more  for  the  covering  that  we  honestly  believe  the 
public  get  a  better  rice,  put  up  more  attractively  and  con- 
veniently, at  the  same  price  they  would  pay  for  an  inferior 
article.  However,  there  are  many  different  grades  of  rice,  and, 
while  the  retailer  gets  10  cents  per  pound  for  Hotel  Astor  Rice, 
consumers  will  always  be  in  a  position  to  buy  some  sort  of 
rice  at  4  cents,  5  cents,  or  8  cents  per  poimd. 

Some  of  the  statements  made  on  this  circular  are  rather 
exaggerated;  for  instance,  tapioca.  "A  package  of  tapioca  con- 
tains twelve  ounces  and  costs  10  cents."  They  have  been  too 
general  in  this  respect,  because  we  put  out  thousands  of  one- 
pound  packages,  and  thus  enable  the  retailer  to  dehver  the 
consumer  sixteen  ounces. 

We  can  realize  that  the  committee  is  naturally  going  to  try 
to  help  the  public  reduce  the  cost  of  living  in  certain  respects, 
and  we  must  admit  that  certain  kinds  of  foods  can  always  be 


TRADEMARKS  AND  BRANDS 


50S 


bought  cheaper  in  bulk  than  in  packages,  therefore  we  cannot 
hope  to  entirely  eliminate  competition  of  this  sort. 

SACRIFICING   THE  QUALITY   OF  TEA   TO  SAVE  20   CENTS   A   YEAR 
(By  W.  A.  W.  Melville,  Vice-President,  Ridgways,  Inc.,  New  York) : 

The  suggestion  that  the  best  quality  of  tea  can  be  regularly 
sold  by  the  grocery  trade  at  40  cents  per  pound  is  too  absurd 
to  receive  serious  consideration.  The  whole  economic  law  of 
supply  and  demand  has  been  cast  to  the  winds,  and  a  sugges- 
tion that  will  save  the  average  individual  about  20  cents  a  year 
is  seized  upon  to  help  reduce  the  cost  of  living.  It  means 
sacrificing  clean,  pure  tea,  the  quality  of  which  is  absolutely 
assured  in  the  package,  for  bulk  tea  the  quality  of  which  cannot 
be  assured  at  the  next  purchase,  unless  the  grocer  has  a  full 
knowledge  of  blending;  not  to  speak  of  the  impaired  strength 
and  damage  to  the  bulk  tea  through  contamination  with  sur- 
rounding odors. 

The  public  have  appreciated  the  necessity  of  the  package  to 
provide  them  continuously  with  tea  of  the  same  quality.  The 
intentions  of  the  committee  are  undoubtedly  of  the  best,  but 
when  four  cups  of  tea  cost  only  one  cent,  the  committee  could 
better  afford  to  show  the  public  how  much  more  money  they 
could  save  by  drinking  the  least  expensive  beverage — tea — in  the 
place  of  other  beverages.  It  would  amount  to  many  times  the 
20  cents  a  year  represented  by  the  present  suggestion. 

We  do  not  consider  that  the  circular  will  have  any  effect  on 
the  sale  of  tea  in  packages. 

committee's  STATEMENTS  EVIDENCE  OF  INSUFFICIENT 

INVESTIGATIONJ 

(By  E.  Biardot,  President,  The  Franco-American  Food  Company) : 

I  have  read  with  great  astonishment  the  contents  of  the 
circular  issued  by  the  Committee  on  Food  Supply  of  New  York 
City,  and  signed  by  George  W.  Perkins,  chairman. 

My  astonishment  is  caused  by  the  seeming  total  ignorance  on 
the  part  of  Mr.  Perkins  of  the  stock  of  bulk  goods  and  the  usual 
state  of  that  stock  in  the  grocery  store  in  which  the  people,  for 
whom  the  circular  is  evidently  intended,  do  their  purchasing. 

How  a  citizen  of  New  York  can  make  the  statement  that 
"As  a  matter  of  fact,  it  is  possible  for  your  grocer  to  keep  on 


.104 


TRADEMARKS  AND  BRANDS 


TRADEMARKS  AND  BRANDS 


hand,  in  bulk,  exactly  the  same  foods  as  the  packages  contain, 
and  it  is  also  possible  for  him  to  keep  them  in  bulk  in  a  per- 
fectly sanitary  manner,  so  that  dust  and  dirt  cannot  reach 
thera,"  passes  my  comprehension. 

It  is  to  be  noticed  that  the  statement  above  is  based  on  a 
possibility  and  not  on  the  actual  state  of  things. 

No  doubt  bulk  goods  can  be  bought  cheaper  (in  most  cases 
they  are  of  inferior  quality),  but  when  we  see  canned  peaches 
compared  to  evaporated  peaches,  canned  apricots  compared  to 
dry  apricots,  canned  peas  compared  to  dry  peas,  I  wonder 
how  a  campaign  against  package  goods  can  be  based  on  such 
assertions. 

Do  Mr.  Perkins  and  his  committee  know  how  canned  fruit 
and  canned  vegetables  are  prepared  in  the  average  reputable 
preserving  factory?  Do  they  know  how  bulk  dried  fruits  are 
carried  and  kept?    They  evidently  do  not. 

I  do  not  mean  to  say  that  dried  beans,  dried  peas,  or  dried 
fruit  caiinot  be  advantageously  used  for  certain  purposes,  but 
comparing  them  with  vegetables  and  fruit  which  are  cooked 
and  preserved  when  fresh  seems  to  me  preposterous. 

When-  the  advocates  of  bulk  goods  make  the  assertion  that 
bulk  crackers  can  be  compared  with  crackers  put  up  in  tin  or 
cartons,  they  evidently  have  not  studied  the  subject  from  the 
point  of  view  of  taste  and  flavor — let  alone  the  question  of 
sanitary  reasons  which  cannot  be  denied — and  they  have  surely 
not  looked  into  the  stock  in  the  stores  of  a  number  of  average 
quality  grocers. 

You  ask  if  such  a  campaign  is  apt  to  injure  our  trade  and  I 
answer  that,  inasmuch  as  you  cannot  buy  soup  in  bulk  (at  least 
I  know  of  none  which  is  sold  that  way  and  would  be  fit  to  eat), 
such  a  circular  as  the  one  I  have  read  will  not  affect  our  sales. 
That  is  why  I  am  at  hberty  to  discuss  openly  the  points  men- 
tioned above,  without  being  accused  of  partiaUty. 

ADVERTISING   DOES  NOT  ADD  TO  COST  OF  PACKAGE  GOODS 

(By  N.  Musher,  President,  the   Pompeian    Company    [Olive   Oil], 

Baltimore) : 

[Editorial  Note.— The  following  letter  was  sent  to  the  Mayor's  Commit- 
tee, and  published  in  the  New  York  Journal  of  Commerce.] 

When  foods  are  sold  in  bulk  the  retailer  who  sells  the  goods 
to  the  consumer  is  the  only  one  back  of  them.    He  is  the  only 


505 


one  the  consumer  can  look  to  for  correct  weight  or  measure, 
absolute  purity,  good  quahty,  and  fair  price. 

There  are  about  250,000  retailers  in  the  United  States,  and 
each  must  be  responsible  to  his  customers  for  the  quantity, 
quality,  purity,  and  price  of  every  commodity,  while  the  city. 
State,  and  Federal  authorities  will  have  to  retain  the  services  of 
thousands  of  inspectors  to  watch  the  sanitary  conditions,  the 
exactness  of  weights  and  measures,  the  purity  and  quality  of 
the  products  sold,  and  last,  but  not  least,  as  to  the  price  in  each 
store. 

Is  it  to  be  left  to  these  retailers  to  buy  what  suits  each  best 
and  sell  it  in  bulk  to  the  purchasing  public,  with  no  guarantee 
that  what  they  sell  is  the  best  that  can  be  had  for  the  money? 

If  your  committee  will  purchase  in  the  open  market  standard 
foods  that  bear  the  name  of  the  manufacturer  or  packer,  and 
compare  them  with  goods  packed  under  the  distributor's  private 
label,  you  will  find  a  marked  difference.  This  will  show  you 
that  it  is  of  the  utmost  importance  to  purchase  only  goods  that 
bear  the  packer's  name.  Regardless  of  the  standing  of  the 
merchant  under  whose  name  these  goods  are  packed,  the  packer 
always  puts  the  best  under  his  own  name. 

Don't  be  fooled  by  the  thought  that  the  consumer  pays  for 
advertising,  nor  that  a  food  product  well  advertised  involves  a 
great  profit  for  the  packer  to  afford  advertising  it.  Advertising 
reduces  the  cost  of  material,  reduces  the  cost  of  the  container, 
reduces  packing  charges  and  overhead  expenses  by  increasing 
the  volume  of  business,  so  that  judicious  advertising  is  not  an 
expense,  but  the  contrary. 

Those  that  advertise  and  expect  to  sell  goods  on  the  strength 
of  advertising  alone  find  to  their  sorrow  that  advertising  is  only 
an  adjunct  to  merchandising;  the  first  essential  is  to  produce 
or  pack  an  article  of  merit  to  be  retailed  at  a  fair  price.  The 
advertising  is  to  let  the  people  know  that  you  have  succeeded. 
It  persuades  the  public  to  try  the  goods  once;  the  quahty  and 
price  must  make  it  a  household  article  afterward. 

When  the  Pompeian  Company  entered  the  olive-oil  field. 

How  Olive  about  seven  years  ago,  a  four-ounce  bottle  was  called  a 

Oil  Was  half  pint,  an  eight-ounce  bottle  a  pint,  and  a  sixteen- 

^^'^^^-  ounce  bottle  a  quart.     The  four-ounce  bottle  retailed 

*  for  25  cents,  the  eight-ounce  bottle  for  50  cents,  and 

the  sixteen-ounce  bottle  retailed  for  $1.     The  sale  of  olive  oil 

was  limited  to  the  new  fancy  stores  who  catered  to  the  wealthy 


506 


TRADEMARKS  AND  BRANDS 


ti 


classes  only.    Olive  oil  was  not  within  the  reach  of  the  everyday 
purchaser. 

To-day  eight  ounces  is  a  full  half  pint,  with  the  contents 
plainly  marked  on  every  package,  and  retails  everywhere  in  the 
United  States  at  25  cents.  A  full  sixteen-ounce  tin  retails  at 
50  cents,  and  a  thirty-two-ounce  full  quart  tin  at  $1.  A  good 
many  retailers  who  do  a  large  volume  of  business  sell  Pompeian 
olive  oil  even  at  less  than  the  prices  named  above  because  of 
theu*  volume  of  business. 

We  have  our  prices  marked  on  every  tin,  so  that  the  retailer 
cannot  take  the  advantage  of  charging  more  than  the  regular 
rate.  Remember  that  every  packer  who  estabhshes  a  fixed  sell- 
mg  price  plainly  stated  on  the  package  is  doing  so  for  the 
protection  of  the  consumer. 

We  have  invested  approximately  $1,000,000  in  advertising 
and  missionary  work  to  get  the  proper  distribution,  but  not  a 
cent  of  that  was  ever  charged  to  the  goods  themselves.  It  is 
carried  on  our  books  as  an  investment  in  good  will.  Any  one 
buying  a  package  of  Pompeian  olive  oil  to-day  is  receiving  a 
cent's  worth  for  every  cent  parted  with,  the  best  of  olive  oil 
packed  in  the  most  convenient  package  at  the  least  possible 
price.  Our  watchfubess  commences  at  the  source  of  pro- 
duction. 

Food  sold  in  bulk  by  the  average  retailer  cannot  be  called 
jtolly  pure,  as  it  can*t  reach  the  consumer  free  from  dirt  and 
filth.  When  sold  in  the  original  package,  however,  it  can  be 
dehvered  exact  in  weight,  standard  in  quaUty,  pure  and  clean 
from  dirt  and  filth,  and  at  a  fair  maximum  price. 

To  sum  up,  the  consumer  deals  direct  with  the  producer  when 
he  buys  onginal  package  goods.  The  producer  is  directly 
responsible  to  the  consumer,  while  the  jobber  and  retailer  only 
act  as  the  agents  of  producer  and  consumer.  They  are  the 
brokers  and  work  on  a  very  low  commission  scale.  They  guard 
the  interest  of  the  consumer  against  unfair  manufacturers  of  in- 
ferior commodities. 

These  rephes  to  the  circular  of  the  Mayor's  Committee  were 
not  introduced  into  this  compilation  immediately  after  the  cir- 
cular, because  it  was  believed  that  their  real  weight  would  not 
be  appreciated  without  some  restatement  of  what  actually  is 
taking  place  in  the  advertising  field.    Many  of  the  achievements 


TRADEMARKS  AND  BRANDS 


507 


which  have  been  discussed  in  the  intervening  pages,  representing 
the  positive  contributions  of  advertising  to  modem  methods  of 
selling,  either  were  not  familiar  to  the  committee  or  were  ignored 
by  them.  In  any  case,  a  knowledge  of  the  fact  that  these 
developments  are  going  on  makes  it  clear  that  any  attack  upon 
advertised  goods  which  closes  its  eyes  to  some  of  these  larger 
aspects  of  advertising  is  based  upon  an  incomplete  considera- 
tion of  the  essential  factors. 

A  careful  reading  of  the  replies  here  quoted  serves  to  make  it 
clear  that  the  only  convincing  arguments  set  forth  on  this  ques- 
tion are  those  based  on  real  service  to  the  consumer.  Moreover, 
this  controversy  illustrates  admirably  one  fact  about  adver- 
tising which  advertising  men  are  being  forced  to  recognize. 
That  fact  is  that  the  strongest  arguments  in  its  favor  are 
those  based  on  its  effect  upon  the  distribution  process,  which 
effect  is,  for  most  consumers,  obscure,  intricate,  and  uninterest- 
ing. 

For  example,  the  committee  report  emphasizes  the  cost  of 
the  package,  but  it  makes  no  mention  of  the  minimizing  of  this 
cost  by  volume  of  sale,  nor  does  it  make  any  compensating 
allowance  for  wastage  and  spoilage  of  bulk  goods,  both  in 
transit  from  the  factory  to  the  store  and  in  the  home  after  it  is 
bought.  None  of  its  comparative  figures  makes  due  allowance 
for  what  might  be  called  the  "cost  of  consuming" — that  is,  the 
cost  of  fuel  and  labor  and  other  items  in  preparing  these  foods 
for  final  use.  In  places  where  fuel  is  costless  and  where  the 
housekeeper's  time  has  no  appreciable  value,  and  where  other 
elements  of  the  cost  of  consuming  are  negligible,  the  price  of 
goods  at  the  store  may  represent  a  fair  measure  of  their  value, 
but  elsewhere  the  price,  ready  for  final  consumption,  with 
storage,  waste,  and  all  preparation  cost  included,  ought  to  be 
the  final  basis  of  comparison.  This  price  it  is  impjossible  to 
quote.  But  the  continued  demand  for  trademarked  goods 
indicates  that  the  consuming  public  uses  it  in  measuring 
ralues.    The  public  apparently  takes  into  account  the  serv- 


i 


508 


TRADEMARKS  AND  BRANDS 


TRADEMARKS  AND  BRANDS 


509 


ices  which  have  been  rendered  and  chooses,  whether  consciously 
or  not,  those  goods  the  final  net  cost  of  which  to  them  is 
least,  after  they  have  given  weight  to  the  costs  of  final  prep- 
aration. 

In  the  case  of  clothing  this  same  process  of  factory  preparation 
has  been  at  work  longer.  A  generation  ago  household  econo- 
mists or  their  predecessors  were  urging  women  to  buy  un- 
bleached muslin,  bleach  it  for  themselves,  and  make  up  their 
own  underclothes.  Unquestionably  clothes  made  in  this  way 
were  of  good  quality  and  represented  a  small  money  outlay. 
But  the  gentle  persistence  with  which  the  "consumers"  pursued 
white  sales  and  neglected  the  unbleached  muslin  counter  had 
finally  made  it  clear  that  the  ready-to-wear  clothes  were  in  the 
long  run  more  economical  for  most  purchasers. 

The  development  in  the  case  of  foods  has  been  slower  for  a 
number  of  reasons,  chief  among  them  being  the  difficulty  and 
cost  of  guaranteeing  satisfactory  quality  and  conditions  of  sale. 
This  has  been  overcome  in  a  number  of  striking  instances 
by  the  development  of  an  identifying  mark  and  a  large  as- 
sumption of  responsibility  by  the  producer.  Even  yet  the 
importance  of  this  change  in  methods  of  marketing  is  only 
beginning  to  be  appreciated.  The  selling  of  goods  under 
trademark  has  come  to  stay — the  Mayor's  Committee  to  the 
contrary  notwithstanding — and  at  least  in  certain  lines  and 
under  certain  conditions  this  method  represents  a  substantial 
advance  over  the  methods  of  bulk  selling  of  unidentified  goods. 
Its  place  in  the  distribution  system,  however,  probably  will  not 
be  that  of  a  sole  occupant  of  the  field. 

The  comparison  of  retail  prices  of  goods  at  the  store,  even  if 
we  leave  out  of  consideration  the  additional  cost  of  preparing  the 
goods  for  consumption,  is  not  an  altogether  fair  measure  of 
the  social  and  economic  value  of  the  trademark  method  of  doing 
business.  This  is  another  place  in  which  the  obscure  contribu- 
tions of  advertising  outweigh  the  immediate  and  apparent  ones. 
In  some  cases  the  economies  in  sale  which  have  been  made  pos- 


sible by  the  expansion  of  business  through  trademark  exploita- 
tion have  been  more  than  enough  to  offset  large  increases  in  the 
cost  of  raw  material.  Grape  juice,  for  example,  now  sells  at 
about  one  half  what  it  did  in  1897,  while  the  price  of  grapes  has 
increased  from  $10  per  ton  to  $40  per  ton. 

Some  concrete  cases  discussing  the  effect  of  advertising  on 
the  price  and  quality  of  the  goods  are  contained  in  the  following 
symposium: 

*This  symposium  will  provide  advertising  men  with  what  they 
have  heretofore  largely  lacked — convincing  facts  and  figures 
with  which  to  fight  the  reviving  delusion  that  "advertising  is 
a  tax  on  the  consumer." 

This  accusation,  hoary  with  medieval  ignorance  as  it  is,  is 
nevertheless  being  seriously  entertained  in  quarters  that  have 
the  power  to  do  considerable  harm.  For  example,  the  Oldfield 
Bill,  which  is  now  having  new  hearings  in  Washington,  would 
in  its  final  effect  put  a  trademarked  brand  at  the  tender  mercies 
of  price-cutters  everywhere. 

The  Oldfield  Bill  is  only  a  symptom  of  a  vast  mass  of  un- 
educated opinion  behind  it.  Supporting  it  are  those  manufac- 
turers who  are  continually  claiming  that  they  can  undersell 
their  advertising  competitors  "because  they  do  not  have  to 
meet  a  big  bill  for  publicity."  Every  advertiser  has  had  to 
meet  competition  times  without  number  on  this  slogan. 

Heretofore  attacks  upon  advertised  goods  have  been  met  by 
general  argument;  but  general  argument,  no  matter  how  true 
it  is,  is  not  strictly  evidence,  and  it  was  evidence  Printers'  Ink 
sought  when  it  sent  a  letter  to  a  number  of  leading  advertisers. 
In  this  letter  advertisers  were  asked: 

"Can  you  give  us  some  definite  figiu^s  proving  that  since 
you  began  advertising  one  of  these  three  things  is  true: 

"1.  Prices  of  your  goods  have  been  reduced  as  a  result  of  the 
larger  output  secured  through  advertising. 

"2.  Quality  or  intrinsic  value  of  goods  has  been  increased. 

"3.  If  neither  proposition  can  be  proven,  can  you  show  that 
price  and  quality  have  remained  stable  in  face  of  increased 
cost  of  raw  material  and  workmanship?  " 

*PrirUera*  Ink,  January  22, 1914,  p.  3. 


510 


teadejViarks  and  brands 


TRADEMARKS  AND  BRANDS 


511 


A  reading  of  the  contributions  from  the  prominent  advertisers 
below  will  reveal  the  overwhelming  nature  of  the  evidence  in 
favor  of  advertised  goods.  In  statement  after  statement  it  is 
proved,  without  qualification,  that  advertising  has  been  instru- 
mental in  increasing  quality  and  reducing  price  or  in  increasing 
quality  and  keeping  price  stable  despite  increasing  costs  of 
manufacture.  If  these  statements  were  words  only  they  would 
not,  of  course,  be  deserving  of  the  significance  that  must  be 
attached  to  them.  But  the  assertions  made  are  backed  by 
advertising  appropriations  which  in  the  aggregate  represent 
miUions  of  dollars  a  year. 

DIOXOGEN  ADVERTISING  HAS  KEPT  RETAIL  PROFITS  NORMAL 
(By  J.  G.  Timolat,  President,  the  Oakland  Chemical  Company); 

We  cannot  give  you  any  definite  information  about  any 
product  except  our  own.  There  is  a  good  deal  of  hearsay 
information  on  both  sides  of  the  question  as  to  whether  adver- 
tising increases  the  cost  of  goods,  and  we  do  not  think  that 
general  statements  will  cover  the  question,  because  so  much 
depends  on  the  article  itself  that  every  article  should  be  con- 
sidered by  itself. 

In  the  case  of  Dioxogen,  some  two  or  three  years  ago,  reduced 
costs  of  manufacture,  due  to  larger  production,  induced  us  to 
increase  the  size  of  our  package  33j  per  cent,  each  on  two  sizes, 
and  25  per  cent,  on  the  third  size,  without  any  change  of  prices 
whatever,  either  to  jobber,  retailer,  or  consumer. 

A  few  years  before  that— I  am  not  quite  sure  of  the  date— 
we  had  reduced  the  prices  of  one  of  our  size  packages  20  per 
cent,  without  any  compensating  advantage  to  us,  so  that  in  this 
particular  case  there  have  been  two  actual  bona  fide  important 
reductions. 

Manufacturers  and  advertisers  carry  a  good  deal  of  a  load  of 
censure.  With  a  product  Hke  Dioxogen,  where  we  attempt  to 
establish  a  uniform  price  throughout  the  United  States  by  pre- 
paying freight  charges,  so  that  the  wholesale  or  retail  distributor 
in  one  part  of  the  country  buys  his  goods  at  the  same  price  that 
the  distributor  in  some  other  part  of  the  country  buys  his,  it  goes 
without  saying  that  a  competitor  located  near  the  manufac- 
turer's own  plant,  who  does  not  maintain  such  a  policy,  can 
on  the  face  of  it  sell  his  goods  just  so  much  less,  and  in  that 
particular  territory. 


Again,  a  manufacturer  of  a  proprietary  article,  whether  it 

be  medicinal,  toilet,  food,  or  wearing  apparel,  always  considers 

during  the  time  of  introduction  that  his  expenses  of 

of^mrZ  Jiitroduction  are  part  of  the  capital  investment;  while 

dudion    ^^  keeps  an  eye  on  the  amount  so  expended,  he 
rarely  expects  to  get  any  immediate  return  of  that 
expenditure. 

Most  of  the  widely  advertised  articles  have  more  or  less 
irregularity  in  the  way  of  spending  an  advertising  appropria- 
tion. Some  firms  spend  a  great  deal  of  money  for  a  certain 
period  and  then  reduce  that  expenditure  to  give  themselves  a 
chance  to  catch  up.  All  of  these  matters  are  questions  of 
individual  ideas  and  experience,  and  it  is  only  after  an  article 
is  well  established  that  the  proportion  of  advertising  expenses 
should  be  really  considered  as  one  of  the  elements  of  cost. 

Another  point  that  is  usually  overlooked  is  that  a  product 

which  is  widely  advertised  and  which  has  a  high  reputation  to 

maintain  spends  a  good  deal  of  money  in  investigation, 

C/w^e*    overhead  charges,  etc.,  which  a  product  which  sells 

keep  ^  ^^^y  ^^^^  tlie  price  standpoint  does  not  carry. 
Standard  In  the  case  of  Dioxogen,  this  expense  is  very  heavy. 
We  do  an  enormous  amount  of  research  work  which 
is  of  great  value  to  the  consuming  public.  Oiu*  non-advertising 
competitor  does  not  hesitate  to  seize  on  any  of  this  information 
and  appropriate  it  as  he  pleases,  attributing  to  his  goods  (of  a 
more  or  less  similar  character)  all  that  he  can  with  any  advan- 
tage. The  question  of  quality  or  standard  is  a  very  elastic  one 
for  the  non-advertising,  no-reputation  manufacturer. 

These  are  only  a  few  of  the  considerations  of  this  general 
subject.  It  is  safe  to  say,  however,  that  after  all  of  these 
matters  are  summed  up  the  net  profit  of  the  advertising  manu- 
facturer is  not  larger  than  the  net  profit  of  the  non-advertising 
manufacturer,  and  he  has  to  depend  ultimately  on  the  volume 
of  business  which  he  establishes. 

The  public  at  large  does  not  understand  or  appreciate  the 

costs  of  doing  retail  business.     The  public  does  not  seem  to 

realize  that  its  demands  on  retail  distributors  are  such 

of  the     *^^^  ^^^  retail  distributor  has  got  to  make  a  relatively 

Dealer    large  profit,  and  retailers  themselves  frequently  over- 
look this  point  in  their  criticism  of  the  advertised 
article.     Most  advertised  articles  provide  a  proper  profit  for  the 
retailer,  and  they  get  little  or  no  credit  for  this  consideration,    j 


512 


TRADEMARKS  AND  BRANDS 


Without  advertising,  which,  after  all,  does  give  the  consumer 
a  standard  of  value,  there  would  be  nothing  to  prevent  individual 
retail  distributors  from  demanding  and  receiving  a  perfectly 
abnormal  profit,  and  in  all  probability,  if  it  were  possible  in  the 
drug  line  to  average  up  the  prices  that  people  paid  for  peroxide 
of  hydrogen  before  the  Dioxogen  advertising,  and  the  average 
prices  that  they  pay  now,  it  would  be  found  that  the  present 
retail  prices  are  fully  50  per  cent,  lower  than  the  prices  that 
existed  previous  to  Dioxogen  advertising,  and  this  without  any 
consideration  of  manufacturing  costs. 

In  other  words,  where  the  retail  distributor  sells  an  article 
of  which  the  public  has  no  knowledge  of  its  value,  the  profits 
that  he  makes  are  excessive  and  much  larger  than  he  is  legiti- 
mately entitled  to  make.  If  we  had  a  few  business  men  as 
law-makers  it  might  be  easier  to  inject  a  little  common  sense 
into  legislation  which  attempts  to  influence  business  methods. 


ADVERTISING   HAS  CUT  SELLING   COST  IN  TWO 
(Statement  from  Hart,  Schaffner  &  Marx,  Chicago) : 

What  you  want  is  definite  figures,  which  appear  to  us  rather 
diflScult  to  give.  Advertising  is  a  general  charge;  the  only  way 
to  estimate  its  effects  is  by  general  results.  These  general  facts 
we  are  able  and  willing  to  give  you. 

When  this  house  began  advertising  the  business  amounted  to 
about  $1,500,000  a  year;  there  were  at  that  time  a  number  of 
clothing  concerns  doing  a  larger  business  than  that.  To-day 
our  gross  sales  amount  to  more  than  $15,000,000;  we  are  the 
largest  clothing  manufacturers  in  the  country. 

We  believe  our  business  would  have  grown  without  adver- 
tising. We  do  not  think  it  would  have  reached  anything  like 
its  present  volume,  nor  that  the  growth  would  have  been  accom- 
plished with  anything  like  the  same  speed. 

Volume  alone  would  have  enabled  us  to  decrease  the  cost  of 
the  goods;  but  advertising  has  undoubtedly  decreased  also  the 
cost  of  selling.  It  costs  to  sell  our  goods  only  half  as  much  as 
it  cost  fifteen  years  ago;  we  figure  the  advertising  as  part  of  the 
cost  of  selling. 

As  to  the  increase  in  quality  or  intrinsic  value  in  the  goods, 
we  believe  that  has  been  very  decided,  although  it  is  not  easy 
to  make  definite  comparisons.    Twenty  years  ago  we  made 


TRADEMARKS  AND  BRANDS 


513 


suits  that  could  be  sold  at  retail  for  $10  and  $12;  to-day  we 
make  no  suit  that  can  be  retailed  under  $18  or  $20.  But  we  are 
putting  much  greater  value  into  the  $18  or  $20  suit  than  we 
could  have  done  fifteen  years  ago.  Twenty  years  ago  a  large 
part  of  our  product  was  lower  priced  than  our  lowest  price  now; 
you  see  that  comparisons  are  diflScult. 

But  the  advertising  has  not  only  reduced  costs;  it  has  made 
possible  higher  standards  of  business. 

You  may  be  able  to  extract  from  the  foregoing  some  facts 
that  will  be  of  value  to  you;  if  so  we  shall  be  pleased. 


kodak's  DECREASED  RETAIL  PRICES 
(By  L.  B.  Jones,  Advertising  Manager,  Eastman  Kodak  Company) : 

There  can  be  no  argument  as  to  the  benefits  to  the  public 
through  our  increased  output,  which  increase  in  output  is 
due,  in  large  measure,  to  our  continuous,  extensive  advertis- 
ing- 

Largely  increased  output  means  economies  in  every  direction, 

but  especially  in  the  matter  of  automatic  machinery,  which 
makes  it  possible  to  turn  out  uniform  goods  at  greatly  reduced 
costs.  It  means  a  reduction  in  overhead  expenses  that  more 
than  ofiFsets  the  advertising  expense,  which  is,  of  course,  a  part 
of  such  overhead. 

The  decreased  retail  prices  cited  below  would  have  been 
impossible  on  the  old  manufacturing  and  marketing  basis. 
Increased  consumption,  due  in  large  measure  to  the  fact  that 
we  have  taught  the  people  the  pleasures  that  are  to  be  derived 
from  photography,  has  made  possible  the  present  low  prices  of 
photographic  goods.  As  a  matter  of  fact,  the  percentage  of 
advertising  cost  to  the  total  volume  of  business  is  much  smaller 
than  most  people  imagine. 

We  became  national  advertisers  in  1888,  the  year  in  which 
the  Kodak  was  first  placed  on  the  market.  This  first  Kodak 
made  a  picture  2§  inches  in  diameter,  was  a  crude  and  bulky 
affair  as  compared  with  the  cameras  of  to-day,  and  sold  for  $25. 
To-day  we  sell  a  camera  made  of  better  material  throughout, 
capable  of  making  better  pictures,  mechanically  and  optically 
superior  to  the  old  one,  and  taking  a  picture  2ix3|  inches,  at 
$10.  We  make  another  camera,  selling  at  $2,  which,  so  far  as 
the  picture-taking  capabilities  are  concerned,  is  superior  to  this 


mi 


II? 


« 


514 


TRADEMARKS  AND  BRANDS 


original  $25  Kodak  This  latter  camera  is.  however,  not  so 
well  finished  as  was  the  $25  instrument 

4  J^I^^'  T^i^f  comparison  can  be  made  if  we  take  the 
4x5  size.    In  1892  we  were  seUmg  a  No.  4  Foldine  Kodak 
which  made  a  4x5  picture,  at  $60.^  This  camera  had  f  moid 
rectilmear  lens,  was  equipped  with  a  rising  and  sliding  front 

tTm.  «nH  '^'^  «?•*  '^''^*^'  ^°^  t'*^*  days.VovidinTfor  both 
time  and  instantaneous  exposures.  It  was  a  handsomely 
finished  box  but  extremely  bulky,  was  made  of  mahogany  aad 
cherry,  and  ^vered  with  a  fine  grade  of  leather.    To-day  we 

Sipt^d  Sk  JVr*  °^•*^^  "^'^^  'y^'  b"t  mulh 
improved.     Ihis  Kodak  also  has  a  rising  and  sliding  front  and 

Lf K^k '^^T^"^^  '"  '^^*  ""'f  ^^  *'^  originlr&S 
^5fW  -n  Tliis^^*°iera  is  made  of  aluminum  covered  with 
leather,  will  go  in  the  pocket  and  loads  in  daylight,  whereas  the 
old  one  was  a  dark-room  loader.  The  price'^is  $20,  aH^inst 
$60  for  the  original  camera  in  this  size.  against 

.    I  can  go  on  similarly  through  our  whole  line  and  show  marked 

pXTThf-^"  '^'  goods  at  equally  marked  reductrns  S 
^ce  to  the  consumer.    And,  by  the  way,  in  spite  of  these 

1^  ii        \^  "^^^  ^  ^^^  ^^""^y  days  referred  to. 

film  itliK^  i^'^  "^"^^  P"^  ^*^  ^^^  ^°  educed,  but  the 
film  it^lf  has  been  vastly  unproved.     In  comparing  the  car- 

aS^HtTl!,f  .K^*^  *^^^  *^  ?^^  ^"^y  improved  in  speed  and 
quality,  but  they  are  now  ortho^Jiromatic  to  a  high  decree  and 

o^  ^  T.  «  1  ^^  ?ld«»' whereas  originally  it  was  ^ated 
only  on  the  emulsion  side,  the  gelatine  bax^king  now  offset- 
tog  t^e  cm-kng  caused  by  the  emulsion.     Instead  of  S 

^?  r    *u  '^''P^^u  P^P^""  ^^*^^  ^^  ^^  «^  one  side  and  black 

w^  thf  o^W '^^^^  ""^^r'T  l^"^"^*  deterioration  than 
b^n   InL^   ^^A    .^^^'^^Shthe    retail    price    has    not 

h^tofo^      '  '^^'^''''  ""^'^^^  ^^  P^^fi*  ''  larger  than 

It  is  my  opinion  that  this  matter  of  profit  to  the  dealer  as 
well  as  the  matter  of  price  to  the  public,  should  be  bro^t  out 
becaij^  the  opponents  of  the  price  maintenance  system  are 
already  trying  to  make  out  that  under  such  system  the  Jailer 
becomes  only  a  rent-paying  clerk.  retailer 


TRADEMARKS  AND  BRANDS  515 


ADVERTISING  HAS  MADE  YEAR-BOUND  MARKET 
(By  F.  T.  Joy,  of  E.  A.  Mallory  &  Sons) : 

Since  starting  to  advertise  in  1906  our  sales  have  increased 
270  per  cent.  This  increased  demand  for  Mallory  hats  which 
our  advertising  has  created  enables  us  to  run  our  factory  on 
full  time  the  year  round,  making  a  great  reduction  in  overhead 
charges.  Formerly,  in  common  with  all  manufacturers  of 
unadvertised  hats,  we  were  able  to  run  to  full  capacity  just 
during  the  two  hat-buying  seasons  of  the  year,  with  a  long  dull 
period  between  each  season. 

Since  starting  to  advertise  in  1906  we  have  made  a  saving  of 
17  per  cent,  in  the  total  cost  of  selling  Mallory  hats.  This  saving, 
which  amounts  to  seven  cents  on  every  hat  we  manufacture, 
more  than  pays  our  advertising  appropriation.  The  saving  in 
selling  expenses  has  largely  been  brought  about  through  the 
increasing  demand  for  Mallory  hats  which  our  advertising  has 
created,  enabling  our  salesmen  in  many  cases  to  sell  double  the 
amount  of  goods,  with  little  or  no  increased  travelling  expenses. 
Formerly  our  salesmen  could  not  interest  dealers  in  every  place 
they  visited;  now  they  sell  many  dealers  in  every  town  and 
city  visited,  and  in  quantities  which  are  constantly  increasing. 

This  great  saving  made  in  our  manufacturing  and  selling 
expense  is  largely  due  to  advertising,  and  the  consumer  is 
benefited  by  it  because  we  can  now  give  better  values  than 
formerly,  even  in  the  face  of  increased  cost  of  raw  material  and 
workmanship. 

SAYS  HIS  GOODS  PROVE  CONTENTIONS 

(By    W.  J.  Leonard,  Vice-President    and    Treasurer,    Burnham    & 

Morrill  Company): 

In  our  opinion  it  can  be  readily  proven  that  advertising  of 
food  products  lowers  the  prices  to  consumers. 

B.  &  M.  Fish  Flakes  is  the  product  which  we  advertise  most 
extensively.  Our  price  to  the  wholesale  grocery  trade  is  25 
per  cent,  less  to-day  that  it  was  four  years  ago,  advertising 
causing  increased  sales,  and  naturally  increased  production 
brought  about  this  change. 


fi\ 


ilG 


TRADEIVLUIKS  AND  BRANDS 


crease  quality  whenever  possible.  ^averusing,  is  to  m- 

same  general  advance  in  our  o^-n  selling  price 

VOLUME  OF  SALES  KEEPS   PRICES  STABLE 
(By  F.  A.  Harding,  of  Wm.  Undereood  Company) : 

ceS'Sl'^^r"*^.  "r  '•"^  "'^''y^  1^"  advertised  to  a 

pla^  ?erann,e4  vSh:rt"a"n';  nl-*"'.  "''"^^''t?  '^''^ 
KS^  -7-«^^nT-"LX  fderofobSgtal 
Tn  lO^^J""*'"""'  dl^tr-l'ution  of  the  product.  ^ 

in  1909  the  appropnation  was  materially  increased  to  »  «,.n. 
which  while  comparatively  smaU.  wa^  as  JfTL  we  feh  Z 
hrl^"'""'^  ':''"'**  r""""*'  ^''d  ««  much  fpaS  Zt  SssiWe 

During  the  thirty  years  that  Underwood's  Deviled  Ham  ha, 
been  on  the  market  to  any  considerable  extent  our  ctoss  nriSs 

^mvc  ueneniea  Dy  an  increased  distnbut  on  of  the  orodnot  H„*» 


TRADEIVIARKS  AND  BRANDS 


517 


I 


The  largest  increase  in  our  sales,  and  also  the  largest  increase 
in  our  trade  discount,  has  been  during  the  last  four  years,  when 
we  have  spent  more  money  for  advertising.  We  feel  absolutely 
confident  that  had  it  not  been  for  the  inauguration  and  sys- 
tematic management  of  this  advertising  campaign,  our  business 
would  be  stationary  or  declining  instead  of  gradually  increasing, 
and  that  the  tremendous  cost  of  selling  the  product  without 
advertising,  combined  with  increased  cost  of  the  product,  would 
have  necessitated  prices  beyond  the  reach  of  a  large  percentage 
of  the  present  consumers. 

In  other  words,  the  only  thing  which  permits  us  to  continue 
business  on  the  present  basis  is  the  increased  volume  obtained 
during  the  last  few  years. 


ADVERTISING   KEEPS  DOWN  COST  OF   PRODUCTION 

(By   V.   L.   Price,    Chairman    of    Executive    Committee,    National 

Candy  Company) : 

I  do  not  believe  the  selling  price  is  in  any  way  affected  by 
advertising. 

It  is  true  that  advertising  increases  sales,  and  naturally  an 
increase  in  sales  brings  about  certain  economies  in  manufacture 
and  purchasing  of  materials  which  affects  the  cost  of  pro- 
duction. 

It  is  not,  however,  always  the  case  that  this  lower  cost  of 
production  means  a  lower  price  to  the  consumer,  for  the  reason 
that  very  frequently  goods  are  placed  on  the  market  in  the 
beginning  without  sufficient  or  legitimate  profit  to  the  manu- 
facturer and  he  is  obliged  to  take  his  chances  of  success  of  his 
selling  and  advertising  plans,  and  through  these  bring  about 
through  the  lower  cost  of  production  above  mentioned  a  legiti- 
mate profit. 

It  is  also  in  our  line  of  business  practically  impossible  to 
advance  the  price  to  the  consumer  with  advancing  raw  materials. 
The  price  must  be  kept  uniform,  as  the  consumer,  through 
advertising,  has  in  his  mind  a  distinct  conviction  as  to  the  price 
per  pound  or  per  package  of  our  product,  and  that  price  has  no 
relation  whatsoever  to  the  cost  of  materials;  therefore  when 
materials  go  up  our  profit  is  less,  and  when  they  go  down  our 
profit  is  more,  and  our  salvation  lies  in  the  working  of  the  law 
of  averages. 


4\ 


518 


TRADEMARKS  AND  BRANDS 


One  great  effect  that  advertising  has  upon  our  goods  is  the 
improvement  m  quality  and  package,  and  uniformity  of  both, 
as  well  as  a  decided  stimulant  to  the  liberal  treatment  of  the 
trade  and  good  service. 

The  habits  of  consumers  of  our  products  are  well  fixed,  and 
it  would  make  no  difference  whether  we  advertised  our  goods 
or  not,  that  habit  would  prevent  paying  a  higher  price  than  is 
customary  to  pay,  and  would  practically  destroy  the  sale  of 
products  which  were  offered  at  a  lower  price  than  it  is  customary 
to  pay. 

Advertising  does  nothing  more  or  less  with  us  than  to  make 
known  to  the  consumer  our  products,  and,  of  course,  in  praising 
our  products  we  have  to  be  particularly  careful  that  the  product 
itself  in  quality  and  appearance  comes  up  to  all  that  we  say 
about  it. 

I  cannot  in  any  way  accede  to  the  supposition  that  adver- 
tising increases  the  price  to  the  consumer  of  the  majority  of 
advertised  products. 

The  cost  of  advertising  is  in  all  cases  equalized  by  a  lower 
cost  of  production  due  to  increased  sales,  and  if  advertising  were 
not  done,  then  in  my  judgment  the  cost  of  production  would 
increase,  and  as  a  result  the  selling  prices  to  the  consumer 
would  have  to  continue  the  same. 

We  find  in  our  business  that  where  unadvertised  goods  are 
substituted  for  advertised  goods  at  a  less  price,  in  all  cases  they 
are  goods  of  an  inferior  quality. 

We  have  competition  from  goods  of  equal  quality  that  are 
not  advertised,  and,  of  course,  this  competition  is  effective  only 
to  the  extent  of  the  personal  influence  of  the  salesman  selling 
the  goods,  and  naturally  the  advantage  is  in  favor  of  the  adver- 
tised goods,  because  of  the  appreciation  of  the  majority  of  good 
dealers  of  advertising  and  its  help  to  them  in  selling  advertised 
goods. 


PRICES  UNCHANGED  DESPITE  COSTLY  MATERIALS 
(By  Edward  Freschl,  President,  Holeproof  Hosiery  Company) : 

I  believe  that  your  effort  to  collect  definite  and  tangible  facts 
proving  that  advertising  does  not  result  in  the  consumer  paying 
a  higher  price  is  a  laudable  one,  and  I  hope  that  you  will  be 
successful  in  collecting  valuable  data. 


TRADEMAEXS  AND  BRANDS 


519 


In  regard  to  our  own  enterprise  I  have  the  following  to 
report: 

1.  Prices  of  our  goods  have  not  been  reduced  as  a  result  of 
the  larger  output  secured  through  advertising;  we  originally 
placed  on  our  goods  popular  prices  corresponding  with  those 
which  were  being  received  for  unadvertised  goods  that  were 
equal  or  inferior  in  value. 

2.  The  quality  of  our  goods  has  been  continually  improved 
in  a  general  way  in  the  ten  years  in  which  we  have  been  engaged 
in  this  particular  business,  but  the  improvement,  as  I  said,  has 
been  a  general  one,  and  it  is  diflScult  to  represent  it  in  actual 
figures. 

3.  Our  prices,  both  to  the  trade  and  to  the  consumer, 
are  identically  the  same  as  they  were  in  1904,  although 
the  cost  of  raw  material  and  workmanship  have  increased 
materially  since  that  time.  As  a  matter  of  fact,  our  goods 
that  retail  at  25  cents  per  pair  cost  us  20  cents  per  dozen 
more  to  produce  to-day  than  they  did  in  1905;  and  it  is, 
of  course,  due  to  the  fact  that  we  have  steadily  increased 
our  volume  of  business  by  means  of  advertising  that  we  are 
able  to  continue  to  market  these  goods  at  the  same  price  to 
the  consumer. 

Would  say,  furthermore,  that  hosiery  handled  by  jobbers  is 
being  sold  in  competition  with  our  product,  selling  at  the  same 
price  to  the  consumer  without  any  advertising  whatever;  it  is 
sold  without  a  guarantee  of  any  kind,  whereas  our  product  is 
sold  under  a  six  months*  replacement  guarantee;  and  it  is  sold 
in  most  cases  without  a  brand  or  trademark,  which,  of  course, 
is  a  disadvantage  to  the  consumer  as  against  his  buying  a 
product  which  carries  the  manufacturer's  name  or  trademark. 
Some  of  these  goods,  I  will  admit,  are  more  attractive  in  app)ear- 
ance  than  ours;  but  I  will  maintain  that  none  of  them  is  made 
with  any  consideration  as  to  wearing  qualities,  on  which 
feature  we,  of  course,  place  the  greatest  emphasis.  This  ought 
to  be  an  important  item  in  making  comparisons  between 
advertised  and  unadvertised  hosiery,  especially  at  a  time  when 
the  question  of  "high  cost  of  living"  is  receiving  so  much 
attention. 

There  are  other  trademarked  brands  of  hosiery  (unadvertised) 
on  which  a  large  distribution  and  sale  has  been  worked  up;  but 
as  far  as  my  knowledge  goes  it  has  cost  just  as  much  to  effect 
this  volume  of  business  by  means  of  the  selling  methods  that 


520 


TRADEMARKS  AND  BR.\NDS 


TRADEMARKS  AND  BRANDS 


521 


were  used  as  it  would  have  cost  if  advertising  to  the  consumer 
had  been  the  means  employed. 

CORN  FLAKES  CHEAPER  AND   BETTER 
(By  R.  O.  Eastman,  of  the  Kellogg  Toasted  Corn  Flake  Company): 

We  can  give  definite  evidence  proving  both: 

1 .  That  prices  of  our  goods  have  been  reduced  as  a  result  of 
the  larger  output  secured  through  advertising. 

2.  Quality  and  intrinsic  value  of  goods  have  been  increased. 
As  to  No.  1,  when  our  product,  then  known  as  Sanitas  Toasted 

Corn  J;  lakes,  was  first  placed  on  the  market  the  package  was 
one  third  smaller  and  sold  for  15  cents.  With  the  increased 
distribution  resulting  from  national  advertising  we  have  in- 
creased the  size  of  the  package  50  per  cent,  and  decreased  the 
price  to  the  consumer  33i  per  cent.,  so  that  the  consumer  to-day 
receives  more  than  twice  as  much  for  his  money  as  he  did  of  the 
unadvertised  product. 

Quality  and  intrinsic  value  have  both  been  greatly  increased. 
More  than  $50,000  a  year  is  spent  in  our  factory  in  maintaining 
mspection  and  in  safeguarding  devices  which  are  scarcely  in 
evidence  to  the  casual  observer,  and  which  in  all  likelihood 
would  not  be  missed  by  the  consumer.  Only  raw  material  of  the 
highest  standard  is  used  in  making  our  products.  For  example 
there  is  only  a  very  small  amount  of  sugar  used  in  the  flavoring 
of  the  flakes  m  a  single  package.  The  proportion  of  sweetening 
is  so  infinitesimal  that  saccharine  could  be  used  with  perfect 
results  and  could  only  be  detected  by  expert  chemical  analysis, 
ihe  use  of  saccharine  in  place  of  granulated  sugar  would  save 
our  company  $50,000  a  year,  but  instead  of  reducing  the 
quality  even  to  this  extent  we  prefer  to  pay  the  $50,000  a  year 
additional  and  use  the  highest  grade  white  sugar  obtainable. 

Another  feature:  This  year  we  are  spending  $100,000  to  place 
an  absolutely  moisture-proof  seal  on  our  packages  so  as  to  carry 
the  goods  to  the  consumer  in  identically  the  same  condition  as 
when  they  leave  our  ovens. 

STABILITY  IN  A   HARD-FOUGHT  FIELD 
(By  Floyd  Y.  Keeler,  Business  Manager,  I.  W.  Lyon  &  Sons) : 

You  ask :  1  Have  the  prices  on  your  goods  been  reduced  as  a 
result  of  the  larger  output  secured  through  advertising? 


To  which  we  answer,  No,  because  the  popular  price  of  a 
dentifrice  is  25  cents,  although  our  powder  through  price-cutting 
and  through  merchandising  factors  is  sold  at  20  cents  or  less. 

2.  Has  the  quality  or  intrinsic  value  of  the  goods  been  in- 
creased.^ 

Yes,  we  have  steadily  and  consistently  improved  the  style, 
convenience,  and  stability  of  the  container,  taking  into  account 
and  safeguarding  the  public  welfare  at  every  turn.  These  im- 
provements and  refinements  have  of  course  increased  manu- 
facturing cost. 

3.  If  neither  position  can  be  proven,  can  you  show  that  price 
and  quality  have  remained  stable  in  the  face  of  increased  cost  of 
raw  materials  and  workmanship? 

In  regard  to  this,  we  can  show  this  without  any  qualification 
or  mental  reservation  whatever,  because,  although  the  cost  of 
labor  and  raw  material  have  increased  very  much  (and  owing  to 
the  fact  that  most  of  our  raw  materials  are  imported,  the  tariff 
has  been  a  large  factor,  and  still  is),  and  although  we  have  been  at 
the  mercy  of  very  grave  uncertainties  which  would  have  made  it 
very  easy  to  change  the  quality  of  our  product,  using  only 
domestic  materials  which  could  not  equal  our  imported  ones, 
owing  to  the  fact  that  they  cannot  be  produced  in  this  coimtry, 
yet  we  have  made  no  changes,  believing  that  it  was  best  at  all 
costs  to  keep  the  confidence  of  the  public  in  us  and  in  our  ad- 
vertising, even  at  the  sacrifice  of  our  personal  welfare. 

It  seems  to  us  that  the  manufacturer  who  advertises  is  a  man 
of  stability  and  reliability,  and  not  just  an  ordinary  tinkerer 
whose  rise  and  fall  is  generally  meteoric. 


TWENTY  years'   HISTORY  OF  THE  SHAVING   STICK 
(Statement  of  J.  B.  Williams  Company) : 

Perhaps  it  will  be  most  enlightening,  as  far  as  our  contribu- 
tion is  concerned,  for  us  to  take  the  case  of  one  of  our  leading 
articles,  say  our  shaving  stick,  and  follow  it  briefly  through  a 
course  of,  say,  twenty  years,  bearing  in  mind  that  it  was  during 
this  period  that  the  cost  of  living  rose  so  greatly  as  to  cause 
popular  unrest  and  complaint. 

Twenty  years  ago  we  put  out  Williams*  Shaving  Stick  in  a 
metal  leatherette  covered  box  with  a  sUp  cover,  very  simple 
and  extremely  inexpensive.    To-day  the  descendant  of  this 


Ti 


52S 


TRADE^L\RKS  AND  BRANDS 


H 


TRADEMARKS  AND  BRANDS 


523 


If 


leatherette  shaving  stick  is  being  sent  out  in  a  nickeled  box 
with  hinged  cover,  a  container  of  very  much  greater  value, 
convenience,  and  attractiveness.  At  the  same  time  the  net 
saving  of  the  present  shaving  stick  to  the  dealer  is  a  fraction 
over  2  per  cent,  of  the  former  leatherette  covered  shaving 
stick,  and  with  the  additional  advantage  to  the  dealer  that  we 
are  paying  the  freight  on  this  and  other  products  of  our  manu- 
facture, which  was  not  true  until  a  few  years  ago. 

A  point  of  perhaps  important  significance  in  the  present 
discussion  is  the  fact  that  the  consumer  is  getting  20  per  cent, 
more  soap  in  the  nickeled  box  with  hinged  cover  to-day  than  he 
got  years  ago  in  the  plainer  and  less  expensive  box,  so  that  to 
sum  up  the  situation,  the  dealer  is  buying  our  shaving  sticks  at 
2  per  cent,  less  than  the  former  price,  he  is  getting  the  freight 
paid  on  his  shipments,  the  consumer  is  getting  20  per  cent, 
more  for  his  money,  besides  having  it  packed  in  a  much  more 
durable  and  attractive  container,  and  all  this  during  a  period 
when  products  in  general  were  going  upward  in  cost. 

In  addition  to  what  we  have  said  above,  it  is  a  fact  that  our 
advertising  appropriation  for  shaving  sticks  is  to-day  decidedly 
larger  than  it  was  twenty  years  ago. 

ADVERTISING  CHANGES  DRUG  INTO  A  GENERAL  UTILITY 
(By  H.  Dumont,  Manager,  the  Pacific  Coast  Borax  Company) : 

In  the  case  of  "20-Mule  Team"  Borax  it  is  true  that  adver- 
tising has  reduced  the  cost  to  the  consumer  through  an  increased 
output.  When  borax  was  comparatively  unknown  to  the 
average  consumer  it  was  sold  principally  by  druggists,  and, 
being  classed  as  a  drug,  sold  at  a  rather  high  price,  as  high  as 
30  cents  a  pound.  To-day,  through  extensive  advertising, 
"20-Mule  Team"  Borax  has  become  familiar  to  the  consuming 
public,  and  its  naany  household  uses  have  taken  it  out  of  the 
drug  class,  and  it  is  now  sold  largely  through  grocers  as  an 
article  of  general  household  utility.  The  retail  price  to-day  is 
15  cents  a  pound  in  one-pound  packages  and  10  cents  a  pound  in 
five-pound  packages. 

The  quality  of  the  goods  has  not  deteriorated  with  the  re- 
duced price,  but,  on  the  other  hand,  has  improved,  as  better 
manufacturing  facilities  have  been  introduced. 

This,  I  think,  is  a  conclusive  demonstration  of  the  fact  that 


advertising  does  not  add  to  the  cost  of  goods  to  the  consumer, 
but,  on  the  other  hand,  enables  the  manufacturer  to  increase  his 
output,  making  it  possible  for  him  to  introduce  improved 
methods  in  manufacturing,  with  a  consequently  improved  prod- 
uct, and  enables  him,  even  in  the  face  of  increased  labor  costs, 
to  reduce  the  retail  price  on  his  goods  to  the  consumer. 

WHAT  ENABLED   POROSKNIT  TO  GIVE  GUARANTEE 

(By  G.  C.  Williams,  Secretary,  Chalmers  Knitting  Company): 

Prices  on  our  goods  have  not  been  reduced  as  a  result  of  the 
larger  output  secured  through  advertising.  I  might  say  that 
this  is  due  to  the  fact  that  our  merchandise  is  and  always  has 
been  sold  at  what  is  called  a  popular  price,  namely,  50  cents. 
Therefore,  it  would  not  be  good  pohcy  to  reduce  the  price  on 
our  product,  for  the  next  popular  price  is  25  cents,  or  half  of  it, 
consequently  it  would  not  have  quality. 

To  the  second  and  third  questions:  the  quality  and  intrinsic 
value  of  our  goods  have  been  increased  every  year  for  the  nine 
years  we  have  been  in  business,  due  to  the  growth  of  our  business 
and  additional  output  making  this  possible.  To  prove  this  to 
your  satisfaction  it  would  be  necessary  for  us  to  show  you  some 
of  our  garments  made  in  past  years  and  those  we  are  making 
to-day.  The  increase  in  value  means  better  finish,  better 
sateens  for  facings  and  bindings  around  the  neck,  buttons  sewed 
on  better  with  newer  machines  and  more  thread,  better  grade 
of  button  stays,  cover-seaming  the  garments  throughout  with 
six-thread  machines,  and  better  grade  of  cuffs.  We  might  add 
here,  regarding  cuffs,  that  we  can  buy  machines  for  knitting 
cuffs  for  $700  that  will  knit  more  cuffs  per  hour  than  those  we 
use,  which  cost  us  $1,250  per  machine.  We  use  a  yam  in  our 
fabric  which  is  the  best  yarn  of  that  number  that  we  can  buy, 
and  costs  us  in  the  neighborhood  of  2  cents  per  pound  more 
than  the  same  grade  of  yarn  which  other  mills  spin.  We  buy 
this  yarn  because  we  know  it  will  wear  better  and  give  the 
consumer  the  satisfaction  which  we  guarantee  with  every 
garment.  It  has  been  possible  through  our  increased  output 
to  do  all  these  things,  and  we  have  actually  made  such  a  good 
garment  for  the  popular  price  of  50  cents  that  we  did  not 
hesitate  two  years  ago  (and  are  still  doing  it)  to  place  an  absolute 
guarantee  in  every  one  of  our  garments,  that  if  the  purchaser 


m 


n 


524 


TRADEMARKS  AND  BRANDS 


TRADEMARKS  AND  BRANDS 


525 


does  not  receive  purchase  price  value,  in  his  estimation,  that  he 
can  return  it  to  us  in  exchange  for  new  garment  or  the  refund 
of  full  purchase  price,  including  postage. 

QinCK   TELLING   OF    STORY   SAVED   DAY 
(By  William  H.  Ingersoll,  of  Robt.  H  IngersoU  &  Bro.) : 

In  our  opinion  the  dollar  watch  would  have  been  a  very 
questionable  venture  had  it  not  been  that  through  the  agency  of 
advertising  we  were  able  quickly  to  spread  the  intelligence  as  to 
its  existence  and  to  put  forth  our  arguments  as  to  its  merits. 

Salesmanship  and  the  ordinary  trade  channels  would  have 
been  too  slow  to  give  us  a  volume  of  production  that  would 
have  made  the  goods  possible  at  the  price.  It  was  only  that 
we  could  publish  to  the  world  almost  instantly  our  story  that 
we  were  enabled  to  undertake  our  venture. 

We  have  not  revised  our  prices  as  a  result  of  advertising,  but 
we  have  done  what  is  the  equivalent,  for  during  twenty  years  in 
which  there  has  been  a  constant  rise  in  nearly  all  other  products 
we  have  kept  our  prices  the  same,  and  have  at  the  same  time 
made  more  than  a  dozen  improvements  of  great  advantage  to 
the  consuming  public  at  considerable  cost  to  ourselves. 

We  aim  to  maintain  a  uniform  price  and  deliver  the  very 
utmost  that  we  can  at  that  price.  When  I  call  to  your  atten- 
tion that  materials  have  advanced  from  50  to  100  per  cent,  in 
copper,  brass,  etc.,  and  that  our  labor  costs  have  risen  on  an 
average  of  over  40  per  cent,  you  will  see  that  no  tax  has  been 
laid  upon  the  public  on  account  of  our  advertising. 

As  to  the  exact  figures,  it  is  well  known  that  our  dollar  watx^h 
has  always  sold  at  that  price.  We  have  not  changed  our  price 
to  the  public  or  to  the  trade  in  nineteen  years.  Our  output  has 
risen  from  a  few  hundred  to  fifteen  thousand  per  day.  Im- 
proved manufacturing  facilities,  inventiveness,  and  a  constantly 
enlarged  field  cultivated  by  advertising  which  has  kept  people 
informed  of  our  improvements  have  permitted  us  to  progress  in 
the  manner  I  have  herein  described. 

SIGNIFICANT  PRICE-HISTORY  OF  GRAPE  JUICE 

(By  E.  T.  Welch,  Secretary  and  Treasurer,  the  Welch  Grape  Juice 

^  Company) : 

Several  years  ago  the  writer  wrote  an  article  for  Welches 
Moga^ne,  showing  that  how,  through  the  increased  output 


of  Welch's,  made  possible  by  advertising,  the  cost  to  the  dealer 
and  to  the  consumer  had  been  reduced,  notwithstanding  very 
material  advances  in  the  cost  of  grapes.  This  article  was 
quoted  in  Printers'  Ink. 

What  we  have  to  say  now  is  a  repetition  of  some  of  the  same 
statements  which  appeared  in  that  article,  brought  down  to 
date  by  a  reference  to  the  recent  change  in  our  selling  plan,  and 
a  mention  of  the  extremely  high  prices  which  prevailed  for  grapes 
this  last  fall. 

In  the  early  days,  when  our  output  was  very  small,  the  cost 
to  the  trade  on  the  two  largest  selling  sizes  of  Welch's  was  $9 
and  $10  per  case.  As  our  output  increased  prices  were  reduced 
from  time  to  time  until  the  trade  Hst  in  1897  was  $4.75  and  $5 
for  the  same  two  sizes.  In  tlie  year  1897  we  paid  $10  per  ton 
for  our  grapes.  In  1898  we  paid  about  $12  per  ton  for  grapes. 
Our  output  in  each  of  the  years  of  1897  and  1898  was  about 
50,000  gallons,  and,  notwithstanding  the  fact  that  the  business 
was  conducted  at  a  small  loss  in  1898,  we  reduced  the  trade  list 
25  cents  per  case  early  in  1899. 

Since  1898  our  output  has  steadily  increased  each  year,  and 
the  price  of  grapes  increased  so  that  up  to  and  including  the 
year  1910  we  had  paid  $40  per  ton  for  our  grapes  in  each  of 
two  years  and  $43.50  a  ton  in  1910.  During  this  period  the 
trade  list  on  two  of  the  five  sizes  in  which  Welch's  is  bottled 
was  reduced  25  cents  per  case,  and  larger  quantity  discounts 
were  allowed  on  all  sizes.  The  average  cost  of  our  grapes  for  a 
number  of  years  preceding  1913  was  about  $35  per  ton. 

Last  fall  the  Concord  grape  crop  showed  less  than  50  per  cent, 
of  a  yield,  not  only  in  the  Chautauqua  grape  belt,  but  in  all 
other  sections  in  which  Concord  grapes  are  raised.  In  the 
early  part  of  the  season  we  paid  $50  per  ton  for  our  grapes,  and 
the  price  gradually  increased  imtil  the  last  few  days  of  the 
season,  when  we  paid  $60  per  ton. 

Some  months  ago,  before  we  knew  that  the  1913  crop  would 
be  so  small,  and  therefore  were  not  expecting  prices  to  be  any- 
thing like  the  figures  just  mentioned,  we  decided  to  eUminate 
quantity  discounts,  reduce  our  trade  list,  making  the  price  the 
same  to  large  and  small  dealers.  When  we  faced  the  unusual 
grape  conditions  of  last  fall  we  thought  at  first  it  would  be 
impossible  to  put  a  one-price  plan  into  effect,  but  it  was  necessary 
that  we  revise  our  selling  terms.  One  of  the  most  serious  things 
connected  with  the  unusual  situation  was  the  fact  that  even 


5Sd 


TBADEMABKS  AND  BRANDS 


i; 


at  the  high  prices  paid  we  were  unable  to  secure  a  large  enough 
quantity  of  grapes  to  give  us  the  increased  business  in  1914 
that  we  would  ordinarily  expect. 

After  thorough  consideration  we  decided  to  put  the  one-price 
plan  into  effect  by  reducing  the  trade  list  25  cents  per  case  and 
eliminating  all  quantity  discounts,  and  this  is  the  proposition 
which  we  offer  to  the  trade  for  1914.  The  trade  prices  on  the 
two  sizes  that  many  years  ago  sold  for  $9  and  $10  per  case  are 
now  $4  and  $4.50. 

For  ten  years  or  so  the  usual  retail  price  of  Welch's  has  been 
25  cents  for  pints  and  50  cents  for  quarts.  In  deciding  upon 
any  change  m  our  selling  terms  to  the  retail  trade,  we  wanted 
to  make  terms  that  would  insure  the  continuance  of  these  retail 
prices.  The  plan  which  we  decided  upon  makes  it  possible  for 
these  prices  to  be  continued— in  fact,  our  new  terms  are  a 
reduction  to  all  dealers  who  heretofore  handled  in  five-case  lots 
or  less,  and  such  dealers  handle  a  very  large  proportion  of  the 
grape  juice  sold. 

Grape  juice,  or  unfermented  wine,  as  it  was  first  called,  was 
unknown  when  Dr.  Welch  put  up  the  first  dozen  bottles  in  1869. 
Ihere  was  no  demand  for  the  product;  most  temperance  people 
opposed  It,  and  those  who  favored  fermented  wines  of  course 
opposed  It.  The  demand  had  to  be  created.  The  public  had 
to  be  educated— and  because  of  the  fact  that  there  was  very 
little  money  available  for  advertising  and  salesmen,  the  growth 
was  very  small  during  the  first  twenty  or  twenty-five  years. 
Uuring  the  past  fifteen  years  the  growth  in  the  popularity  of 
grape  juice  has  been  quite  rapid— a  growth  made  possible  by 
advertising.  We  believe  that  in  making  Welch's  Grape  Juici 
popular  we  have  contributed  to  the  health  and  the  sobriety  of 
the  nation.  "^ 

We  have  always  paid  a  premium  for  first  quality  grapes  and 
have  accepted  only  first  quality  grapes.  At  $10  per  ton,  the 
price  which  prevailed  for  grapes  in  1897,  the  farmers  did  not 
receive  an  adequate  return,  and  were  beginning  to  tear  out  their 
vmeyards  and  replace  them  with  profitable  crops.  In  the  few 
years  that  immediately  followed  the  farmers  did  not  pay  very 
much  attention  to  the  quality  of  the  fruit  grown  because  of  the 
low  prices  which  prevailed.  Our  insistence  on  quality  has  led 
to  a  higher  standard  for  all  grapes  grown  in  the  Chautauqua 
belt,  and  the  growers  see  now,  as  never  before,  the  need  of 
proper  care  of  their  vineyards  if  they  are  to  produce  first  quality 


TRADEMARKS  AND  BRANDS 


527 


fruit.  In  1912  the  price  which  we  paid  for  grapes  was  about 
$10  per  ton  higher  than  that  paid  by  our  competitors  in  this 
section,  and  Concords  grown  in  the  Chautauqua  belt  always 
bring  a  higher  price  than  those  grown  in  other  sections.  With 
an  exceedingly  short  crop  in  1913,  the  growers  had  the  whip- 
hand,  and  after  we  set  our  price  for  selected  grapes,  our  compet- 
itors had  to  pay  the  same  price  for  "run  of  vineyard"  grapes. 

INCREASE  IN   QUALITY   IN   TEN   YEARS 
(Statement  of  Warner  Brothers  Company) : 

Advertising  which  has  brought  increased  sales  has  permitted 
enormous  increases  in  the  intrinsic  value  of  the  goods. 

We  have  taken  for  comparison  figures  for  a  dollar  Warner's 
Rust-proof  Corset  in  1903  and  1913,  for  it  was  about  1903  that 
our  advertising  really  began  to  attain  the  magnitude  as  to  make 
it  truly  national.  We  give  below  the  per  cent,  figures  of  increase 
or  decrease  in  the  various  items. 

The  cloth  used  was  increased  42  per  cent,  in  quality  in  1913 
over  1903. 

Interiinings,  tapes,  strips,  etc.,  are  the  same  value  for  1913 
as  for  1903. 

Boning  wire,  clasps,  and  metal  parts  have  increased  in  value 
72  per  cent. 

The  actual  value  of  trimmings  used  has  decreased  21  per 
cent.,  but  it  must  be  remembered  that  the  trimming  is  not  so 
much  a  question  of  price  as  it  is  of  good  taste  in  the  selection 
and  make-up,  and  for  this  we  now  have  special  people. 

The  cost  of  labor  per  corset  has  decreased  20  per  cent,  in  the 
last  ten  years,  and  this  is  a  large  saving,  inasmuch  as  the  labor 
is  such  a  large  percentage  of  the  whole.  This  saving  has  been 
made  by  improved  machinery.  But  on  those  operations  which 
have  remained  the  same  during  the  past  ten  years  the  operators 
are  to-day  actually  earning  about  20  to  30  per  cent.  more. 

In  addition  to  the  above  figures  we  have  added  since  1903 
minor  improvements  such  as  hooks,  drawstrings,  etc.,  and 
particularly  hose-supporters,  which  item  alone  costs  almost  four 
times  as  much  as  the  trimmings. 

The  total  value  of  labor  and  materials  in  a  dollar  Warner 
Corset  of  1913  is  37  per  cent,  greater  than  in  1910. 

One  of  the  chief  elements  in  the  quality  of  the  corset  is  the 
design,  and  where  in  1903  our  designing  department  consisted 


I 


538 


TIL\DEMAEKS  AND  BRANDS 


JELL-O  hasn't  changed   PRICE  IN    15   YEARS 
(By  W.  E.  Humelbaugh,  of  the  Genesee  Pure  Food  Company): 

The  letter  from  Printers'  Ink  arrived  at  the  same  time  as  one 
on  the  same  subject  from  A.  Stein  &  Co.,  of  Chicago. 

Ihe  yhicago  firm  sent  us  a  copy  of  the  pamphlet  written  bv 
Alexander  H  Meyer,  of  the  Merchandise  Reporting  Compan/ 
shoppers  for  department  stores,  New  York,  in  answer  fo  a^n 
article  on  Price  Protection  and  the  Consumer,"  recently 
printed  m  the  Outlook.  ^^^^nuy 

This  is  one  of  Mr.  Meyer's  statements: 
1  be  leye  some  day  some  statistician  will  prove  that  the  high 
cost  of  hvmg  can  be  accounted  for  in  a  great  measure  by  the 
vast  sums  spent  for  advertising."  ^ 

He  also  says: 

J'Sa^^u  P^°';^^?,^t^'-s  of  advertised  articles  have  arbitrarily 
raised  their  retail  prices  to  such  a  limit  the  retailer  cannot 
make  a  legitimate  profit,  ^taucr  cannot 

ApiT^liT/n  ^^^^^^^  t^?pm  powder  costs  the  retailer  from 
^  *•  i*/  I  ^^^'  according  to  the  quantity  bought,  and  is 
advertised  for  25  cents  I  verily  believe  its  avemge  Lailprice 
IS  12i  cents,  though  thousands  of  cans  are  sold  for  25  cents  Tn 
spite  of  which  pnccH^utting  the  sales  of  the  maker  a^Tnci^as- 
ing  wonderfully."  "Av-rcdb 

It  is  never  necessaiy  to  teU  an  inteUigent  person  that  facts 

thft  i^r  ^Z^  ^'^''^.  ^J  ^^P^^  manipulators  into  shapes 
that  will  not  be  recognized  by  any  but  very  clear-eved  oeonlp 
In  the  letter  to  the  Chicago  firm  we  said,  among  oTher  thS': 
We  do  not  understand  that  advertisers  are  asking  for 
Government  protection,  but  that  manufacturers  are  endelvor- 
mg  to  secure  recognition  of  their  right  to  maintain  prices.  The 
advertising  talcum-powder  manufacturer  asks  to  be  allowed  to 

SmJ^tftorT.  ""^  ^''^''''*'  """^  ""^  *^^  substitutes  made  by 

"If  there  are  lOn^nt  powders  as  good  as  his  25-cent  article, 
the  people  wiU  be  told  about  them  by  somebody  in  some  sort 
^If  fw 'f^^*  1"^^*^^  people  can  take  their  choice.  The  state- 
ment that  the  high  cost  of  living  is  in  any  wav  the  result  nf 
great  expenditure  fqr  advertising  is  enti^/ b^eless! 


TRADEMARKS  AND  BRANDS 


529 


"To  use  our  own  product  as  an  illustration:  Fifteen  years  ago 
we  spent  a  few  hundred  dollars  a  year  advertising  Jell-0;  now 
we  spend  half  a  million,  and  all  the  time  the  price  of  Jell-0  has 
remained  the  same,  10  cents  a  package,  though  thousands  of 
dollars  have  been  expended  in  increasing  the  quality  of  our 
product." 

ADVERTISING   HELPS  MODIFY  INCREASED   PRICES 

(By  J.  H.  Rairson,  Manager   of   Sales,    McMenamin    &   Company 

[Crab  Meats],  Hampton,  Va.) : 

The  prices  of  our  goods  have  neither  been  increased  nor 
decreased  on  account  of  advertising.  We  have  been  compelled 
to  increase  our  prices  slightly,  which  was  wholly  due  to  the 
increased  cost  of  raw  material,  labor,  transportation,  and 
packages. 

Had  we  not  been  advertising  and  able  to  turn  out  goods  in 
large  quantities,  our  prices,  in  all  probability,  would  have  been 
materially  increased. 

The  quality  of  our  goods  has  been  increased  since  we  began 
advertising,  due  partly  to  advertising. 

We  trust  this  information  will  be  helpful  in  convincing  "non- 
believers  in  advertising"  that  advertising  tends  to  increase  the 
quality  and  decrease  the  price,  rather  than  decrease  the  quality 
and  increase  the  price,  of  advertised  products. 

WHY   ESKAY's  has  NOT  INCREASED   PRICE 
(By  G.  H.  Benhardt,  of  Smith,  Kline  &  French  Company) : 

The  price  and  quality  of  Eskay's  Food  has  remained  stable, 
unchanged  in  any  way  as  to  quality,  as  to  weight  of  contents  in 
containers,  as  to  container  itself,  and  in  any  other  imaginable 
way  in  the  face  of  increased  cost  of  raw  material  and  workman- 
ship. (This  statement,  of  course,  holds  good  only  since  March  1, 
1901,  when  our  present  style  of  package  was  adopted.) 

Our  product  is  made  according  to  a  formula  which  cannot 
be  altered.  It  is  sold  to  the  public  at  a  given  price  and  cannot 
be  changed  from  time  to  time  with  varying  prices.  No  matter, 
therefore,  what  the  cost  of  raw  material  or  workmanship,  there 
has  been  no  additional  charge  to  the  public,  to  the  retailer,  or 
to  the  jobber;  but  all  advances  have  been  at  the  expense  of 
ourselves. 


530 


TRADEMARKS  AND  BRANDS 


TRADEMARKS  AND  BRANDS 


531 


0 


III 


«ii 


In  explanation  of  the  items  of  labor  and  ingredients:  there 
has  been  a  very  decided  advance  in  the  cost  of  ingredients.  The 
cereals,  of  course,  vary  from  year  to  year,  according  to  the  bounti- 
fulness  of  the  crops.  But  the  average  cost  of  cereals  to-day  is 
much  greater  than  it  has  been  during  the  life  of  our  product. 
Government  statistics  will  show  that  barley,  wheat,  and  oats  are 
all  sellmg  higher  to-day  than  five,  ten,  or  fifteen  years  ago.  The 
same  may  be  said  of  sugar  of  milk,  which  is  the  largest  single 
item  entering  our  product. 

As  to  the  item  of  labor,  however,  we  can  truly  say  that  with 
the  growth  of  our  business  we  were  able  to  install  economies  in 
the  way  of  labor-saving  machinery,  which  has  reduced  our  cost 
for  labor. 

To  sum  up,  therefore,  advertising  has  built  our  business  from 
nothing  to  sales  amounting  to  several  hundred  thousand  dollars 
per  year.  With  the  growth  of  this  business,  and  by  reason  of 
handling  larger  quantities  each  year,  we  were  able  to  reduce  the 
Item  of  labor  per  package,  and  in  the  face  of  an  increase  in  the 
cost  of  raw  material  continue  to  give  the  jobber,  the  retailer, 
and  the  consumer  the  identical  goods,  in  the  same  size  package 
and  at  the  same  price  every  day,  every  month,  and  every  year. 

ADVERTISING   DOESN't   FIGURE   IN  COST 

(By  Frank  L.  Erskine,  of  the  W.  L.  Douglas  Shoe  Company) : 

When  Mr.  Douglas  first  started  in  business  in  1876  he  did  no 
advertising.  Shoes  were  figured  at  that  time  probably  like 
many  other  lines  of  goods;  the  items  including  cost  of  leather 
and  other  materials,  labor,  overhead,  profit,  but  no  margin  for 
advertising. 

In  1883,  when  Mr.  Douglas  first  started  to  advertise,  the  same 
method  of  figurmg  our  product  was  continued  and  is  in  use 
to-day,  no  item  of  advertising  expense  being  included.  It  is  a 
demonstrated  fact  that  large  manufacturers  in  the  shoe  business 
can  purchase  leather  and  materials  in  large  lots  cheaper  than 
smaller  manufacturers  can.  By  taking  advantage  of  market 
conditions,  lots  of  leather  can  frequently  be  purchased  at  a  more 
favorable  price  than  later  in  the  year  when  the  demand  is 
heavier.  We  take  advantage  of  all  these  opportunities.  Fre- 
quently contracts  for  sole  leather,  for  instance,  will  involve 
$1,500,000. 


We  claim  and  can  substantiate  it  that  we  give  to  the  consumer 
all  of  these  advantages,  retaining  only  a  small  profit  per  pair, 
and  are  therefore  enabled  to  produce  and  sell  a  better  shoe  at  a 
standard  price,  $4.50,  $4,  and  $3.50,  than  smaller  manufacturers 
who  are  unable  to  buy  in  large  quantities  and  take  advantage 
of  market  conditions. 

I  repeat,  we  do  not  now,  nor  have  we  ever,  figured  our  adver- 
tising as  a  part  of  the  cost  of  a  paur  of  shoes. 

THE  CONVINCING   STORY   OF  WATERMAN's   "  IDEAL " 
(By  F.  P.  Seymour,  of  the  L.  E.  Waterman  Company) : 

The  selling  prices  to  the  public  of  Waterman's  Ideal  Fountain 
Pens  are  substantially  the  same  to-day  as  they  were  at  the 
time  of  their  inception  thirty  years  ago.  This  in  the  face  of  the 
fact  that  both  labor  and  component  materials  of  manufacture 
have  nearly  doubled  in  cost,  taxes  are  higher,  many  items  of 
seUing  expense  are  greatly  increased,  and  competition  is  keener. 

The  fact  that  we  have  been  consistent,  steady,  and  successful 
advertisers  to  the  consuming  world  at  large  is  the  principal 
cause  for  the  quahty  of  merchandise  that  we  supply  and  the 
service  that  we  give  the  public  at  these  same  original  and 
reasonable  prices.  The  expense  of  advertising  Waterman 
Ideals  enters  into  the  cost  of  the  pens,  the  same  as  taxes  and 
import  duties  which  we  pay  to  support  our  Government,  includ- 
ing the  salaries  of  Congressmen,  judges,  Cabinet  oflficers,  and 
others  who  would  be  without  a  livelihood  if  the  country  were 
not  big  and  prosperous  enough  to  keep  them  in  office. 

The  missionary  work  which  must  be  done  on  behalf  of  our 
company  can  be  handled  more  cheaply  through  intelligent 
advertising  than  by  the  employment  of  salesmen  who  must  be 
paid  a  living  wage.  As  this  is  an  important  element  in  the  final 
cost  of  our  product,  we  do  not  hesitate  to  state  that  the  users 
of  our  pens  would  be  paying  a  higher  price  to-day  if  we  had  not 
been  able  to  develop  our  business  with  the  help  of  judicious 
advertising. 

In  the  early  years  of  this  business  all  the  Waterman  Ideals 
were  sold  through  the  direct  efforts  and  solicitation  of  the 
inventor  and  one  or  two  assistants.  The  time  consumed  in  the 
sale  of  each  pen  often  amounted  to  more  in  its  value  than  the 
cost  of  the  complete  pen.  The  business  world  would  never 
have  progressed  on  such  a  sales  basis  unless  possibly  through 


4 


#« 


532 


TRADEMARKS  AND  BRANDS 


an  enormous  selling  organization  which  could  make  the  output 
sufficiently  large  to  warrant  the  minimum  of  cost,  and  it  is  a 
certainty  that  the  per  se  cost  of  such  a  selling  organization 
would  have  been  (and  has  been  found  to  be)  far  in  excess  of  the 
cost  of  the  advertising  method  of  securing  distribution  and 
demand. 

ADVERTISING  AND  MACHINERY  COMPARED 

(By   W.   B.   Morris,   Advertising  Manager,   Northwestern    Knitting 

Company) : 

In  our  judgment,  advertising  has  about  the  same  relationship 
to  the  problem  of  distribution  that  machinery  has  to  the  prob- 
lem of  production. 

It  is  impossible  to  account  for  the  tremendous  increase  in  the 
use  of  advertising  excepting  on  the  ground  that  it  is  a  real 
economy  in  distribution.  It  is  just  as  reasonable  to  say  that 
the  consumer  has  to  pay  for  the  machinery  used  in  the  pro- 
duction of  merchandise  as  it  is  to  say  that  the  consumer  has  to 
pay  for  the  advertising  used  in  giving  the  merchandise  econom- 
ical distribution. 

There  are,  of  course,  unsuccessful  advertisers,  just  as  there  are 
unsuccessful  manufacturers.  It  would  be  just  as  fair  to  con- 
demn the  use  of  machinery  in  manufacturing  because  some 
machines  are  not  efficient  as  it  is  to  condemn  all  advertising 
because  some  advertisements  are  not  efficient.  It  should  be 
obvious  to  every  one  that  if  advertising  did  not  reduce  the  cost 
of  distribution  it  would  not  be  generally  used. 

Munsmgwear  has  been  advertised  since  1898.  It  is  to-day 
sold  by  leading  merchants  in  practically  every  town  and  city  in 
the  United  States.  A  daily  production  of  25,000  garments  is 
required  to  supply  the  demand.  As  the  business  has  grown, 
our  buying  power  has  increased,  the  manufacturing  organiza- 
tion has  become  more  efficient,  the  percentage  of  overhead 
expense  has  been  reduced,  and  the  net  result  has  been  that  it 
has  been  possible  to  produce  better  merchandise  for  less  money. 
A  comparison  of  the  line  as  it  is  to-day  with  the  merchandise 
turned  out  when  the  advertising  started  will  show  the  greatly 
increased  values  offered  to-day. 

If  advertising  added  to  the  cost  of  distribution  we  certainly 
would  not  continue  to  advertise.  If  the  values  offered  were  not 
greater  than  those  to  be  found  in  non-advertised  goods,  the 


TRADEMARKS  AND  BRANDS 


58S 


ii 


merchant  would  certainly  not  buy  in  increasing  quantities  each 
season,  and  certainly  Munsing  Union  Suits  would  not  have 
become  the  most  popular  union  suits  with  the  public  unless  they 
were  the  most  satisfactory. 

In  other  words,  the  manufacturer  advertises  because  it  pays 
him  to  do  so,  the  merchant  handles  advertised  merchandise 
because  it  pays  him  to  do  so,  and  the  consumer  buys  advertised 
merchandise  because  it  pays  the  consumer  to  do  so.  The 
manufacturer,  the  merchant,  and  the  consumer  all  benefit  from 
the  advertising. 

Instead  of  adding  to  the  cost  of  distribution,  it  is  an  economy 
in  distribution. 

ADVERTISING   SELLS  HUGE  VOLUME  OP  SHOES 
(By  Roy  B.  Simpson,*  Advertising  Counsel,  Roberts,  Johnson  &  Rand) : 

I  have  your  letter  requesting  data  to  prove  that  advertising 
does  not  result  in  the  consumer  paying  a  higher  price  for  the 
necessities  of  life.  I  will  endeavor  to  cover  the  points  sepa- 
rately as  follows: 

First — ^The  price  of  our  shoes  to  the  consumer  has  not  been 
reduced  as  a  result  of  the  large  output  obtained  through  adver- 
tising. This  is  due  to  the  fact  that  during  the  last  five  years 
leather  has  advanced  in  cost,  until  it  has  reached  the  highest 
point  ever  known.  The  leather  cost  in  a  pair  of  men's  shoes 
has  advanced  about  sixty  cents  per  pair  during  this  period. 
There  has  been  a  large  increase  in  the  cost  of  other  material  used 
in  shoes,  and  labor  is  higher  to-day  than  it  was  five  years 
ago. 

Let  me  say,  however,  that  our  increased  production,  resulting 
from  advertising,  has  kept  the  price  down  to  a  lower  figure  than 
would  have  been  the  case  with  a  production  of  only  haff  of  what 
we  are  now  turning  out.  No  other  manufacturer  in  America 
can  duplicate  our  shoes  at  our  prices.  We  are  actually  selling 
shoes  for  less  than  it  costs  some  manufacturers  to  produce 
shoes  of  the  same  quality.  Our  large  volume,  amounting  to 
over  fifteen  million  pairs  per  year,  could  not  have  been  obtained 
without  advertising. 

Second— The  quality  of  our  shoes  has  been  constantly  im- 
proved during  the  last  two  years.  Every  shoe  has  gone  up  one 
grade.  For  example,  our  men's  "Patriot"  shoe,  which  to-day 
sells  for  $3.25,  is  as  good  a  shoe  as  our  "R.  J.  &  R.,"  which  sold 


5U 


TRADEIMARKS  AND  BRANDS 


TRADEMARKS  AND  BRANDS 


5S5 


1 


j 


at  the  same  figure  two  years  ago.  The  "  R.  J.  &  R.'*  now  sells  at 
$3.75  wholesale.  The  retail  price  is  $5  to  $7,  according  to 
locality. 

A  non-advertiser  who  claims  that  advertising  increases  the 
cost  to  the  consumer  doesn't  appreciate  the  real  strength  of 
advertising  nor  is  he  content  to  cling  to  the  traditions  of  his 
fathers. 

Many  of  the  non-advertised  lines  are  as  good  in  quality  as 
some  of  the  widely  known,  nationally  advertised  articles  in  the 
same  class,  yet  the  non-advertiser  is  not  enjoying  very  much 
in  the  way  of  big  growth  year  after  year.  The  constant 
advertiser  is  running  ahead  of  him,  is  keeping  up  the  quality 
of  his  merchandise,  and  paying  bigger  dividends  to  his  stock- 
holders. 

VIEWS  OF  OTHERS 

Several  well-known  advertisers,  not  represented  in  the  pre- 
ceding symposium,  replied  briefly,  asserting  their  belief  that 
good  advertising  cannot  by  any  sane  man  be  regarded  as  a  tax 
on  the  consumer.    The  Ansco  Company  writes; 

In  response  to  your  letter  I  will  state  that  non-advertising  manufacturers 
can  only  sell  their  goods  by  offering  a  poor  quality  imitation  of  high-grade 
advertised  products.  It  is  true  that  they  sell  them  on  the  strength  of  the 
price,  and  the  jobber  winks  his  eye  at  the  quality  because  he  has  no  further 
interest  in  the  article  other  than  to  palm  it  off  on  the  public  at  a  profit — or 
what  he  considers  a  profit — for  if  he  looks  closely  into  the  expense  of 
selling  a  non-advertised,  cheap  quality  product  he  will  find  that  he  has 
actually  lost  money  and  reputation  by  selling  something  that  will  not  give 
satisfaction. 

TTie  prices  of  our  goods  have  been  lowered  since  we  commenced  our  maga- 
zine publicity  a  few  years  ago,  and  the  quality  or  intrinsic  value  of  the  goods 
has  been  increased.  This  w^  be  ob\4ous  to  any  one  who  compares  a  copy  of 
our  catalogue  of  three  years  ago  with  our  present  issue.  This  reduction  in 
price  and  increased  quality  or  intrinsic  value  of  the  goods  has  taken  place  in 
the  face  of  the  increased  cost  of  raw  materials  and  workmanship. 

The  Minute  Tapioca  Company  of  Orange,  Mass.,  writes: 

While  we  have  nothing  tangible  to  present,  at  the  same  time  we  know  beyond 
doubt  that  the  increased  business  brought  about  by  advertising  has  cut  our 
factory  expenses  to  such  an  extent  that  although  the  price  of  raw  material 
for  two  years  or  more  has  been  especially  high,  we  have  been  able  to  maintain 
our  regular  price  to  the  consumer. 


L.  W.  Wheelock,  of  Stephen  F.  Whitman  k  Son,  Inc.,  manu- 
factiu'ers  of  chocolates,  states  pithily: 

We  might  say  in  passing  that  in  the  last  six  years  our  output  has  increased 
fourfold,  qualities  have  improved,  prices  have  not  been  increased,  despite  the 
fact  that  with  one  exception  all  raw  materials  entering  into  our  products  have 
been  advanced  in  price. 

The  vice-president  of  the  Stein-Bloch  Company  does  not 
think  that  figures  are  necessary,  and  says: 

It  occurs  to  us  that  figures  should  not  be  necessary  to  refute  the  contention 
tliat  advertising  is  a  tax  on  the  consumer;  a  logical  analysis  should  be  sufficient. 
Where  are  the  figiu-es  that  prove  that  advertising  is  a  tax  on  the  consumer? 

Charles  R.  Stevenson,  general  manager  of  the  National 
Veneer  Products  Company,  making  Indestructo  baggage,  would 
not  cheerfully  face  the  new  year  if  his  advertising  appropriation 
should  be  withdrawn.    He  says: 

We  are  convinced  that  were  we  to  discontinue  our  advertising,  our  business 
would  fall  off  at  least  50  per  cent.,  which  would  force  us  to  distribute  our  over- 
head over  about  half  the  production  which  we  are  now  getting.  This  would 
increase  our  cost  per  trunk  very  much  more  than  the  saving  per  trunk  which 
we  would  make  by  discontinuing  our  advertising  would  amount  to. 

The  B.  T.  Babbitt  Company  states  in  a  few  fines  the  price 
history  of  its  soap.  Forty  years  ago,  it  says.  Babbitt's  Best 
Soap  sold  for  10  cents  a  cake;  it  now  sells  everywhere  at  6  for 
25  cents.    And  then  the  writer  adds  significantly: 

In  all  laundry  soaps  it  can  be  proved  that  the  large  output  obtained  through 
advertising  has  enabled  the  manufacturer  to  cut  manufacturing  and  selling 
cost  to  the  very  great  advantage  of  the  consumer. 

Before  the  system  of  selling  goods  under  a  trademark  has 
assumed  its  final  place  it  will  be  necessary  to  arrive  at  more 
definite  conclusions  than  now  are  possible  concerning  a  number 
of  diflScult  questions.  Not  the  least  important  of  these  is  the 
question  as  to  who  ought  to  assume  responsibility  for  quality 
and  conditions  of  sale. 

On  this  subject  there  are  two  diametrically  opposed  positions 
which  have  wide  acceptance: 


536 


trademauks  and  brands 


f^ 


1.  According  to  the  first  premise,  the  distnlmtor,  wholesale 
or  retail,  of  any  product  (identified  or  not)  alone  is  responsible 
to  the  public,  m  all  the  market  he  attempts  to  cover,  for  the 
article  s  quality  and  for  the  conditions  under  which  it  is  sold 
1  he  producer  has  no  substantial  interest  in  his  product  (whether 
It  be  identified  or  not)  after  he  delivers  it  at  a  satisfactory  price 
to  a  distributor  to  convey  to  the  consuming  public.     The  vari- 
ous  distributors  may,  of  course,  hold  the  producer  respon- 
sible  to  themselves  for  the  quality.     Nevertheless,  they  them- 
selves  undertake  a  direct  responsibility  to  meet  the  demands 
of  the  consuming  public  in  this  respect  and  to  distribute  the 
goods  in  a  manner  satisfactory  to  the  public.     Anything  which 
hampers  them  in  the  performance  of  these  services  reduces 
their  ability  to  give  value  for  what  the  public  pays. 

The  acceptance  of  this  premise  leads  to  an  insistence  on  the 
rights  of  the  distnbvtor  to  be  the  sole  judge  of  his  selling 
prices.  ^ 

2.  According  to   the  second  premise,   the  prodvcer  of  an 
Identified  product  is  responsible  to  the  public,  in  all  the  market 
he  attempts  to  cover,  for  the  article*s  quality  and  for  the  con- 
ditions  under  which  it  is  sold.     When  the  producer  identifies 
his  product  (by  brand  or  otherwise),  he  thereby  assumes  re- 
sponsibihty  for  quality,  and  this  responsibility  is  to  the  consumer 
a^  well  as  to  the  distributor.     He  also  assumes  an  obligation  to 
the  consumer  for  satisfactory  conditions  of  sale  (ease  of  purchase, 
accessibility,  etc.).    The  assumption  of  these  obligations  by 
the  producer  of  this  kind  of  products  makes  it  necessary  that 
he  have  m  his  control  the  power  and  the  opportunity  to  fulfill 
these  obligations. 

The  acceptance  of  this  second  premise  leads  logically  to 
some  forms  of  enforcible  control  by  the  producer  over  resale 
prices. 

The  conflict  represented  by  these  two  premises  is  the  basis 
of  the  controversy  between  nationally  advertised  trademarks 
and  "private  brands.*' 


TRADEMARKS  AND  BRANDS 


(2)    TRADEMARKS  VERSUS  PRIVATE  BRANDS 


537 


The  issue  between  trademarks  exploited  by  manufacturers 
and  private  brands  is  somewhat  more  obscure  in  the  case  of 
shoes  than  it  is  in  some  other  lines,  but  the  essential  elements 
of  the  controversy  as  it  occurs  in  the  shoe  trade  are  typical. 
Three  shoe  men  who  appeared  before  a  congressional  committee 
discussing  various  bills  relative  to  fraud  in  commodities  in 
interstates  commerce,  and  particularly  relative  to  bills  requiring 
the  manufacturer  to  put  his  name  on  his  product,  gave  testi- 
mony presenting  the  points  of  view  of  successful  shoe  dealers. 

•Andrew  C.  McGowan,  head  of  the  shoe  department  of  the 
John  Wanamaker  stores  in  New  York  and  Philadelphia,  took 
the  stand  and  gave  his  views  in  a  straight-from-the-shoulder 
manner.  He  is  opposed  to  the  use  of  the  maker's  name  on 
shoes,  and  as  one  of  the  right-hand  men  of  such  an  extensive 
advertiser  as  John  Wanamaker,  Mr.  McGowan's  views  for  so 
doing  are  of  interest  to  national  advertisers. 

Mr.  McGowan  spoke  in  his  capacity  as  President  of  the 
National  Shoe  Retailers'  Association.  This  organization,  he 
explained  to  the  sub-committee,  of  the  Committee  on  Interstate 
and  Foreign  Commerce,  represents  the  leading  and  some  of  the 
smaller  shoe  retailers  in  the  United  States.  The  fundamental 
requisite  of  membership,  he  stated,  was  the  honest  retailing  of 
shoes,  adding:  "We  cannot  better  our  business  by  faking  the 
public.  We  have  spent  time  and  money  in  prosecuting  those 
who  do  fake  in  our  trade.  We  felt  the  need  of  organization 
to  prevent  the  public  from  being  taken  advantage  of." 

In  arguing  against  the  use  of  the  word  "adulterated"  in 

connection  with  shoes  not  made  wholly  of  leather,  the  Wana- 

maker  manager  said:  "There  is  a  principle  in  retaihng 

^ji^e   merchandise  and  also  in  wholesaling  it,  either  from 
*' Adulter-  the  manufacturer  or  the  wholesaler,  to  keep  from 

ai€d"     raising  questions  of  doubt.     When  one's  mind  is  made 

up  that  a  thing  ought  to  be  leather  or  ought  to  be 

steel,  if  you  please,  and  some  substitute  is  used,  a  doubt  is  raised 

which  makes  the  sale  harder  to  make;  and  the  harder  you  make 

*Pnnteri  Ink,  February  5,  1914,  p.  13. 


538 


TR.\DEMARKS  AND  BRANDS 


TRADEMARKS  .\ND  BRANDS 


539 


if 


t 


it  possible  to  dispose  of  goods,  the  greater  you  increase  the  cost 
of  disposing  of  them  and  that  cost  the  dear  pubUc  pays;  it  pays 
all  costs." 

A  few  manufacturers  would  have  control  of  the  manufacture 
and  sale  of  shoes,  according  to  Mr.  McGowan,  if  a  law  were  to 
be  passed  compelling  the  placing  of  the  manufacturer's  name 
on  each  shoe  produced.  Continuing,  he  said  in  part:  "I  can- 
not aflFord  to  advertise  for  the  manufacturers  and  have  their 
names  on  the  shoes.  How  many  wearers  of  shoes  would  go 
back  to  the  manufacturer  in  case  of  difficulty  with  the  shoes? 
You  would  drive  out  of  business  some  27,000  shoe  retailers  in 
the  United  States  and  put  in  business  the  trademarked  shoe  men 
who  are  with  us  to-day  and  who  pay  their  managers  $15,  $20, 
and  $25 — I  do  not  know  one  that  gets  $35.  And  you  know 
they  contend  their  work  is  done  in  the  factory,  and  such  manu- 
facturers claim  to  sell  directly  from  the  manufacturer  to  the 
consumer  at  a  less  price,  but  it  costs  such  manufacturers  just 
as  much  to  dispose  of  their  goods  as  it  cost  me,  because  where 
tliey  sell  one  pau*  I  sell  twenty-five  pairs." 

Congressman  Barkley  interposed  a  question:  "You  said  a 

moment  ago  that  if  a  manufacturer's  name  were  required  to  be 

placed  on  the  shoes  that  the  shoes  would  sell  then  on 

Admits    the  reputation  of  the  manufacturer  instead  of  on  the 

Aw'  repu^^ion  of  the  retail  dealer;  is  that  right?" 
Benefits  "That  would  be  the  effect  generally;  yes,  sir." 
Consumer  Pressed  by  the  congressman  for  further  answers  as 
to  whether  individuality  in  shoes  and  the  reputation 
of  a  manufacturer  were  not  factors  in  making  sales  of  shoes,  the 
witness  said:  "If  a  man  has  bought  a  shoe  with  Hanan's  or 
Nettleton's  name  on  it — and  they  are  delightful  names  to 
conjure  with — had  bought  shoes  that  were  all  right,  that  were 
comfortable  and  pleased  him  in  appearance,  I  do  not  believe 
you  could  get  him  to  change,  no  matter  whether  he  was  in 
Texas  or  New  York,  But  why  legislate  to  promote  the  business 
of  about  1,300  men — which  would  be  reduced,  IVIr.  Chairman, 
to  about  one  tenth  of  t;hat  number  of  manufacturers  by  this 
legislation — why  promote  their  business  as  against  27,000 
classified  shoe  stores  in  America  and  about  120,000  retailers  of 
shoes  in  the  general  stores." 

In  speaking  of  the  promotion  work  on  behalf  of  the  Douglas 
shoe,  Mr.  McGowan  said:  "A  cfurious  fellow  pasted  on  a  postal 
card,  at  about  the  time  postal  cards  came  out,  a  picture  which 


purported  to  be  that  of  Mr.  Douglas,  although  it  does  not  look 
very  much  like  him  and  never  did,  and  that  postal  card  went 
right  to  Brockton,  Mass.;  he  dropped  it  in  the  post-office 
without  any  address  at  all  on  it  and,  as  I  say,  it  went  to  Brock- 
ton, Mass.     And  that  is  advertising." 

The  Wanjynaker  representative  closed  his  statement  as 
follows:  "To  our  minds,  compelling  a  manufacturer's  name  to 
be  placed  on  an  article  would  put  ui  his  hands  a  weapon  that 
would  destroy  the  profits  of  our  business.  I  will  not  say  any- 
thing about  myself,  but  my  first  assistant  draws  $10,000  a  year; 
I  have  men  around  me  who  draw  big  pay;  but  we  do  a  business 
of  two  and  a  half  million  dollars  at  retail.  That  represents  a 
tremendous  number  of  shoes,  but  we  can  well  afford  to  do  it, 
even  with  these  big  salaries  to  meet.  And  we  do  it  at  a  lower 
cost — and  I  think  this  statement  will  be  unchallenged — than 
any  distributor  of  shoes  at  retail  in  the  world." 

A  $12,000,000  volume  of  business  was  accredited  to  the  Brown 
Shoe  Company  of  St.  Louis,  by  John  Busch,  who  testified 
before  the  committee  as  the  spokesman  of  the  Brown  company 
and  also  as  the  representative  of  the  St.  Louis  Manufacturers* 
Association.     Incidentally  he  said:  "We  job  a  small  proportion 
of  our  total  business — I  should  say  less  than  10  per  cent,  now." 
That  all  shoe  manufacturers  are  not  of  one  mind  with  refer- 
ence to  proposed  legislation  along  the  line  of  the  so-called 
"pure  shoe  bill"  (a  name  denounced  by  some  manu- 
Manu'    facturers  as  a  mischievous  and  misleading  misnomer) 
Jacturers    ^^g  made  dear  during  the  testimony  of  John  W. 
fo^wZi-  Craddock,    president   of   the   Craddock-Terry   Shoe 
ing  Name  Company,  who  appeared  as  the  representative  of  the 
on  Goods   National  Shoe  Wholesalers'  Association.    Mr.  Crad- 
dock, who  opposes  any  such  legislation,  mentioned 
the  name  of  the  Roberts,  Johnson  &  Rand  Shoe  Company,  of 
St.  Louis,  in  connection  with  the  effort  that  has  been  made 
during  the  past  year  or  two  to  secure  the  passage  of  bills  of  like 
purport  in  the  legislatures  of  twenty-two  States  in  the  Union. 
Referring  to  the  above-mentioned  St.  Louis  corporation,  the 
witness  said:  "In  their  advertisements  from  one  end  of  this 
country  to  another  they  make  their  talk  that  they  are  advocat- 
ing pure  shoes  and  pure  under-leather." 

In  the  course  of  his  remarks  Mr.  Craddock  said:  "Personally 
speaking,  our  company  would  rather  like  to  get  our  name 
stamped  on  all  our  stock,  and  we  do  stamp  it  on  our  stock  all 


^ 


540 


TRADEMARKS  AND  BRANDS 


TRADEMARKS  AND  BRANDS 


541 


we  can.  On  the  other  hand,  retailers  have  their  own  views  and 
their  own  rights.  Distributing  merchandise  is  not  always  a 
question  of  best  values.  The  psychology  of  the  proposition  goes 
a  tremendous  way.  A  woman  comes  into  a  store;  she  is  not 
considering  values;  she  wants  a  pair  of  satin  slippers  or  suede 
boots  and  she  will  pay  anywhere  from  $5  to  $7,  and  she  does 
not  consider  the  value.  Now  the  concern  with  the  best  organ- 
ization, advertising  from  the  factory,  is  willing  to  put  $500,000 
in  advertising  and  open  stores  in  every  city  of  30,000  inhabitants 
all  over  the  United  States.  They  are  crowding  the  small  man 
out  because  he  has  got  to  put  all  his  advertising  into  a  single 
venture.  They  cannot  distribute  their  merchandise  and  it 
costs  them  just  as  much.  Take  the  popular  advertised  brands 
of  shoes  which  are  being  sold  in  their  own  stores  to-day.  The 
statement  which  I  make  is  not  based  on  figures,  but  my  opinion 
is  it  is  costing  those  men  more  to  retail  their  goods — a  larger 
per  cent,  to  sell  their  shoes — than  it  is  the  local  dealers,  and  that 
being  the  case,  they  would  not  save  anything  for  the  consumer, 
but  they  will  gradually  crowd  this  other  fellow  out,  and  I  think 
the  ultimate  effect  will  be  higher  prices  and  poorer  service.  It 
would  result  in  monopoly." 

According  to  this  manufacturer,  "the  telephone  and  the 

women  behind  it*'  are  largely  responsible  for  the  increased 

expense  of  selling  goods.    By  way  of  illustration  he 

City  and  contrasted  the  conditions  that  confront  the  average 
S^dL-  ^^^^^  merchant  with  the  case  of  a  general  store- 

tribution  keeper  or  cross-roads  retailer  near  Lynchburg,  Va., 
'Contrasted  to  whom  his  firm  sells  goods.  Said  Mr.  Craddock: 
"That  fellow  owns  his  own  farm  there  and  owns  his 
own  storehouse  and  he  can  really  sell  merchandise  on  10  per  cent, 
profit.  He  is  doing  $10,000  worth  of  business  a  year  and  it  is 
not  costing  him  over  $1,000  to  do  it.  The  man  in  town  is  paying 
$3,000  in  rent  and  has  got  to  keep  electric  lights  and  expensive 
show  windows  and  buy  these  shoes  in  widths  from  A  to  E,  while 
the  countryman  just  buys  one  width;  and  the  city  man  has  got 
to  carry  satin  slippers  and  suedes  and  tango  pumps;  and  a 
woman  will  phone  down  from  a  mile  and  a  half  out  and  ask 
him  to  send  out  a  pair  of  rubbers,  for  which  he  gets  75  cents, 
and  it  will  cost  him  75  cents  to  send  them  out  to  her,  maybe. 
All  these  things  add  to  the  cost  of  city  distribution.  It  is 
legitimate  and  the  people  who  make  it  necessary  have  to  pay 
the  bills,  and  you  cannot  legislate  in  any  way  to  prevent  it 


unless  you  take  the  telephones  out  of  the  houses  and  bring  the 
people  back  again  to  plain,  simple  living." 

A  fraudulent  advertising  bill  and  not  a  "pure  shoe"  bill  is 
what  is  needed  in  the  opinion  of  A.  H.  Geuting,  of  Philadelphia, 
who  appeared  on  behalf  of  the  Shoe  Dealers'  Association.  His 
contention  was  that  the  only  fraud  in  the  shoe  business  to-day 
is  supplied  by  the  piratical  dealers  who  travel  from  city  to  city 
and  advertise  standard  brands  of  shoes  at  cut  prices.  "Com- 
petition in  the  shoe  trade,"  he  said,  "is  so  great  that  we  are  very 
sensitive  to  the  opinion  of  a  customer.  I  will  go  any  length 
before  I  will  let  a  customer  go  out  of  my  store  with  anything 
but  a  smile."  The  Philadelphia  merchant  supplied  the  com- 
mittee with  a  copy  of  the  Pennsylvania  bill  against  fraudulent 
advertising,  and  told  at  some  length  of  how  on  his  initiative 
the  Market  Street  Business  Men's  Association  took  effective 
action  against  a  firm  that  recently  opened  a  store  on  Chestnut 
Street,  Philadelphia,  for  the  sale  of  fm-s  at  cut  prices,  repre- 
senting that  the  furs  were  offered  at  low  prices  because  they 
were  purchased  direct  from  trappers  and  manufactured  in  the 
firm's  own  workshops.  Referring  to  the  Pennsylvania  adver- 
tising law  he  added :  "  Now  if  you  will  give  us  such  an  instrument 
as  that,  we  will  clean  the  shoe  business  of  whatever  fraud  there 
may  be  in  it." 

"Now  what  is  the  real  objection,"  queried  the  Chairman  of 
the  Congressional  Committee,  "to  having  the  manufacturer  put 
his  name  on.'*" 

"I  want  to  tell  you  what  the  real  objection  is,"  answered  Mr. 
Geuting.  "The  retailer  is  the  great  factor  in  administering  to 
the  people  of  this  great  country.  The  shoe  manufacturer  would 
go  backward,  would  retrograde,  if  it  were  not  for  the  retailer 
who  is  constantly  intervening.  He  has  his  ears  and  nose  to  the 
ground  and  knows  public  sentiment.  He  talks  to  the  customer 
and  knows  the  customer's  demands.  It  is  not  the  manufactm^r 
who  builds  the  shoes  of  this  country,  but  the  retailer  who  builds 
the  shoes  of  this  country.  That  is  the  truth  of  the  matter. 
We  put  a  specification  in  the  shoes.  We  state  what  lasts  we 
want;  we  state  what  kind  of  linings  we  want  in  our  shoes,  and 
as  soon  as  we  find  that  certain  linings  wear  better  we  demand 
them  from  the  manufacturer.  It  is  not  the  manufacturer  who 
really  creates  shoes  in  this  country.  We  get  our  ideas  from  our 
customers;  the  manufacturer  interprets  our  idea  from  the  cus- 
tomer through  us." 


r 


542 


TRADEMARKS  AND  BRANDS 


TRADEMARKS  AND  BRANDS 


543 


Charles  J.  Savage,  who  Is  described  as  having  his  "energies 
and  sympathies  enlisted  on  the  side  of  trademarked  advertising 
merchand.se."  presents  the  following  problem  which  states 
clearly  the  issue  between  the  advertiser  and  the  private  brand 
manufacturer  and  compares  their  attitude  toward  each  other 
and  toward  the  trade: 

♦Manufacturers  of  trademarked  advertised  goods  are  wtimn„ 
a  war  of  pretty  stiff  competition  among  themsCthes^ff 

bg  pubii:.''^'"'  '"''"^'"^^' '"'  ^''^  p'*'"-^^  oHhe  ^n'r 

Problems  of  manufacture,  of  distribution,  of  advertising 
come  up,  and  these  advertisers  do  not  aU  agree  ^ith  one  am,the?' 
by  any  means  as  to  the  most  economical  a^pTXble  sZtion 
of  those  problems;  each  has  his  own  peculiar  plans  formdat  J 
and  each  executes  those  plans  in  accorilance  with  the  results  of 

tttTettcoir'^^'"^"  ^^  '''''  --^  ripened  Smeni 

s^m^p"^  s  rXii"  ^^^:s^  teSi^th? 

that  court  cannot  be  reversed  without  an  amendmeS  to  the 
constitution  of  modern  distribution  methods-unZs  but  iht 
following  paragraphs  tell  it.  '  ^"*  ^'^^ 

^^a\  *»u  ^''^^  "PP^'  °'  *^^  manufacturer,  in  his  nrinted 
word  to  th^ -nsumer  to  ask  for  and  to  buy  hi^  goods,  SI 

ri"      ZTJ^J^   tk^  '"^P?"  "^  competition  which  he  is 
Dealer  a.  J^  agamst.    There  is  the  certain  class  of  retailer  to 
o  Comprii- '>^  reckoned  with:  the  dealer  who  knowinelv  sub- 
to,       stitutes,  or  attempts  to  substitute,  another  make  for 
the  one  asked  for,  for  various  reasons— in  neariv 
ever>'  case,  for  the  selfish  reason  of  a  juicier  Drofit  on  ^n^^t  !J 
unknowii  and,  most  likely,  doubtful  quaUy^    S^^^ttf 
l^Tbkfctur''""  practice-take  i?fromVt^wToX:L- 

hat^o  £  isn'ra'?'^n'l°5  '^'t".''  '*"?  advertising  manufacturer 
uas  lo  lace  isn  t  at  an  end.     There  is  another  form  of  it   anrJ 
this  one  IS  a  double-edged  weapon  which,  when  driven  home 
cuts  into  his  distribution  methods  on  one  dde  and  into  his  con ' 
sumersales  on  the  other.    It  is  the  manufacture?of  Ibmnd^; 

*PnnUri  Ink,  August  6,  1914.  p.  3«. 


unadvertised  goods  who  sells  his  product  or  products  direct  to 
retailers  by  means  of  his  sales  force  and  by  direct  advertising, 
and  who  puts  his  (the  retailer's)  own  label  on  the  goods. 

The  last  method,  it  is  easily  seen,  lessens  the  channels  of 
distribution  to  the  advertising  manufacturer,  and  also  places 
the  consumer  selling  element  on  a  strictly  personal,  close- touch 
basis,  by  enabling  the  retail  merchant  to  capitalize  for  himself 
the  confidence  and  good  will  which  exist  between  his  customers 
and  himself. 

It  is  that  last  phase  of  competition  to  which  this  article  is 

given  over;  and  it  may  be  well  to  state  right  here  that  the  one 

and  only  intent  is  to  spread  the  facts  out  on  the  table. 

The       They  tell  their  own  story — or  they  don't  mean  anv- 

^'^^y^^^  Hhing.     One  or  the  other. 

Serioits  Every  one  who  has  made  a  study  of  modem  adver- 
Competit&r  tising  knows  pretty  well  that  the  manufacturer  of 
trademarked,  advertised  goods  has  to  say  to  the 
retail  dealers — whether  he  is  a  manufacturer  of  clothing,  of 
clocks,  shoes,  or  speedometers.  Let's  see  what  he  does  say. 
Easier  sales,  more  sales,  more  frequent  "turnovers,"  bigger 
volume  of  profit,  increased  prestige,  and  er — but  why  not  let 
the  manufacturer  tell  it  himself? 

All  right. 

Alfred  Decker  &  Cohn,  makers  of  Society  Brand  Clothes. 
Chicago,  recently  sent  out  a  large  book  of  advertisements 
to  their  dealers.  The  opening  page  is  headed,  "Why  Sell  an 
Advertised  Line — and  Advertise  It?" 

The  following  excerpts  from  that  talk  contain  the  meat  of  the 
story: 

"There  are   numerous   reasons    why    a    merchant    should 

choose   to   sell   a   nationally   advertised    line,   and    advertise 

j^r,        its  name  in  connection  with  his,  but  the  main  one 

Should    is  there  is  more  money  in  it     .     .     .     because  the 

Dealers    handling  of  this  line  means  a  larger  volume  of  busi- 

Uandle    ness     .     .     .     because  the  business  is  done  with  less 

Brm^sf  *^^^*  ^^^^  effort,  less  friction,  and  hence  less  expense. 
.  .  .  In  selling  a  so-termed  advertised  line  he 
enjoys  the  benefit  of  a  prestige  that  it  has  taken  years  to  build 
up.  His  audience  has  been  made  acquainted,  by  the  maker, 
with  the  merits  of  his  merchandise,  and  unless  the  young  men 
and  men  of  his  community  have  been  informed  beforehand  they 
exercise  no  choice  in  the  store  from  which  they  will  bnv. 


I 


I! 


544 


If 


TRADEMARKS  AND  BRANDS 


II 


■  I  111 


Eadi  year  the  maker  invests  a  large  sum  in  national  adver- 
tismg  in  constantly  reminding  them  (the  men  of  the 

country)  to  seek  their  dealer  in  their  town  .  .  .  in  creatine 
m  their  minds  a  want  for  these  very  clothes.     .  The 

minute  a  manufacturer  begins  to  advertise  in  such  publications 
as  the  Saturday  Evening  Post.  CoUier%  etc.,  he  has  set  a  clothes 
standard  from  which  he  can  never  depart.  .  .  .  The  manu- 
facturer says,  in  effect:  *By  advertising  to  you  in  this  manner 
1  snow  my  confidence  in  my  own  product.  I  am  not  afraid  to 
have  you  put  my  clothes  to  the  test.'  Isn't  it  much  easier  to 
sell  a  man  clothes  that  he  has  seen  advertised  in  a  reputable 
""  «^^f  ?^.  ^^^°  nondescript  clothes  of  which  he  knows  nothing.? 

lUis  m  turn  reflects  favorably  upon  the  merchant  handling 
these  c  othes.     .     .  It  helps  build  the  reputation  of  his  store 

as  a  pla^  where  good  goods  can  be  had  at  reasonable  prices. 

.  .  .  He  secures  not  only  the  trade  which  would  be  influenced 
by  him  personaUy,  but  the  trade  which  has  become  convinced  by 
the  national  advertising  that  these  clothes  are  the  clothes  they 
want.    .  The  big  reason  for  advertising  is  not  to  get  people 

to  write  to  the  manufacturer,  but  to  send  them  into  the  mer- 
chant s  store  with  minds  already  made  up  to  buy.  .  .  It 
teaches  people  to  want  more  things  and  better  things 
It  raises  standards,  educates  buyers  to  choose  the*  best! 
.  .  .  If  all  national  advertising  were  discontinued  for 
a  year  .  .  the  decrease  in  business  in  every  line  would  be 
sensational . 

"Non-advertised  lines  seldom  have  anything  to  commend 
them  except  price     .     .     .    a  permanent  business  can  be  built 

Prir.  n.  '^  f""^   '^•"*^'^^-       '       '       '       ^O    Cmploy    thc    highcst- 

oZaI  P  ,        ^J\^^r*  a  manufacturer  must  have  a  large 

pecUofNon-^^r^^  ^^  business,  that  he  may  supply  dealers  with 

advertised  i^is  advantage  without  extra  cost.     .     .  This  is 

Lines     one  of  the  reasons  clothes  of  indisputable  merit  are  so 

strongly  advertised  in  leading  publications.     .     .     . 

Ihe   increased   business   the   advertising   produces   makes   it 

possible  to  employ  a  high-salaried  master  designer. 

Thus  merchants  who  sell  clothes  of  reputation  and  known 
value  secure  the  benefit  of  this  premier  service.  .  .  Thev 
enjoy  the  increased  trade  which  this  advertising  produces.  . 
I  heir  clerks  use  on  the  average  less  time  to  make  a  sale,  because 
they  are  not  called  upon  to  argue  the  qualities  of  an  unknown 
line;  they  speak  with  confident  affirmation  about  goods  with 


TRADEMARKS  AND  BRANDS 


^45 


«rhich  the  customer  is  already  familiar.  This  saving  in  time 
can  be  traced  in  real  money — it  means  more  sales  in  the  same 
length  of  time,  and  more  sales  mean  more  profits." 

The  clothing  industry  was  not  chosen  as  an  arbitrary  example, 
but  because  it  is  representative,  in  a  general  way,  of  the  attitude 
of  the  manufacturers  who  seek  an  outlet  through  the  retail 
merchants  for  their  trademarked  advertised  goods.  But  since 
the  clothing  trade  has  been  picked  out,  it  may  seem  more 
consistent  to  follow  it  out. 

What  do  manufacturers  of  unbranded,  unadvertised  clothing 

say    to    retail   merchants,   through   their  sales  organizations 

and  through  direct  advertising,  to  induce  them  to 

Arguments  buy  clothing  which  bears  their  (the  retailers*)  own 

Prwaie  ^^^^1?  Their  attitude  is  interesting  and  provocative 
Branders  of  scrious  thought — leaving  aside  altogether  the  truth 
or  fallacy  of  it.  It  must  be  borne  in  mind,  further- 
more, that  these  manufacturers  have  deliberately  chosen  a 
method  of  distribution  which  they  believe  is  best  suited  to  their 
business;  and,  in  doing  everything  within  their  power  to  execute 
this  distribution  policy  most  effectively  and  most  profitably,  they 
are  not  only  well  within  their  rights,  but  they  are  relentlessly 
following  out  what  they  believe  to  be  a  sound,  legitimate  method 
of  marketing  their  merchandise.     Everybody  to  his  faith. 

Let  us  bring  the  claims  of  the  non-advertising,  non-trade- 
marked  clothing  manufacturer  over  to  the  light.  He  has  a 
pretty  long  story  to  tell  to  the  retail  clothing  merchant.  He 
says,  in  effect: 

"The  manufacturer  of  a  line  of  trademarked,  nationally  ad- 
vertised clothing  who  offers  you  his  co-operation  and  his  free 
advertising  matter  looks  like  a  real  benefactor  at  first  glance. 
But  he  isn't.  He  appears  mighty  unselfish — but  he  isn't  that, 
either.  You  must  look  pretty  carefully,  even  under  the  bottom 
row  of  logs,  to  find  the  *  nigger.'  But  he's  there.  As  a  general 
thing,  he  has  to  *jack  up'  his  price,  because  of  the  enormous 
expense  of  his  magazine  advertising.  You  can  easily  see  where 
you  step  off.  Your  margin  of  profit  is  cut  very  close  to  the 
bone.  And  when  I  quote  you  my  prices  and  demonstrate  to 
you  the  quality,  style,  fit,  workmanship,  and  wearing  quaUty  of 
my  line  you've  just  simply  got  to  stop  and  think. 

"Just  as  a  hint,  why  do  you  suppose  so  many  clothing  manu- 
facturers who  advertise  are  opening  up  stores  of  their  own  in 
cities  throughout  the  country? 


546 


TRADEMARKS  AND  BRANDS 


TRADEIMARKS  AND  BRANDS 


547 


I 

•I. 


«ii' 


"  Isn't  it  plain  to  you  that  by  tying  up  with  nationally  adver- 
tised goods  you  become  the  pawn  of  the  manufacturer — you  are 
his  clerk  in  your  locality — a  mere  distributing  machine?  And 
you  aren't  even  pensioned,  because  that  manufacturer  can  drop 
you  like  a  bumed-out  match  when  you  fail  to  satisfy  him  in  the 
matter  of  sales.  Don't  play  into  his  hands  that  way.  You 
own  your  business.  Own  it,  then.  Be  your  own  boss.  Don't 
let  any  man  come  to  you  and  make  yottr  influence  with  your  trade 
subordinate  to  his  influence  just  because  he  sells  you  the  goods 
and  makes  a  lot  of  fancy  promises  which  don't  square  up. 
Analyze  your  own  business  situation  and  you  will  see  the  fallacy 
of  playing  the  drummer  and  general  utility  man  in  his  distribu- 
tion orchestra. 

"What  does  this  national  advertising  of  his  do  for  you.^  It 
boosts  the  cost  of  the  goods,  but  it  doesn't  increase  your  sales 
to  any  extent.  You  may  sell  A's  clothes,  let  us  say.  They  are 
advertised  in  the  magazines;  they  are  advertised  by  means  of 
style  books,  and  by  local  newspaper  advertising  and  by  posters 
in  your  window.  Now,  on  the  next  block,  or  a  few  doors  away, 
maybe,  your  competitor  sells  B's  clothes.  The  advertising  of 
one  firm  offsets  the  other;  you  can  pull  A's  name  out  of  the 
magazine  advertising,  out  of  the  style  books,  out  of  the  news- 
paper advertising,  out  of  the  posters,  and  substitute  B's  name. 
In  the  minds  of  your  customers  there  isn't  the  slightest  bit  of 
difference.  It's  your  store  your  customers  care  about,  don't 
you  see  that?  They  want  to  deal  with  you,  not  with  some  one 
they  never  met,  who  is  making  clothes  thousands  of  miles  away 
from  them. 

"Now,  what  about  this  free  advertising?    You  insert  an 

advertisement  two  columns  wide  by  seven  inches  deep  in  your 

newspaper.    The  manufacturer  is  generous — he  gives 

Manu-  you  the  electro  free.  All  you  have  to  do  is  to  pay 
JadLurer^s^  for    the    space.      That's    free    advertising    matter. 

^i^°^^  And  so  it  is.  Free  to  the  manufacturer,  eight  parts; 
I  Sneered  at  free  to  you,  two  parts.  Think  about  it.  Don't  you 
see  that  it  is  you,  and  the  thousands  of  other  merchants 
like  you,  who  have  made  possible  big  clothing  organizations 
out  of  your  own  pocket — instead  of  each  one  of  you  making  a 
solid,  lasting  success  of  your  own,  based  upon  your  own  name 
and  reputation? 

"Furthermore,  don't  be  deluded  by  this  prestige  bugaboo. 
The  advertising  cost  is  added  to  the  cost  of  the  clothing — ^you 


pay  for  it,  your  customers  pay  for  it.  This  idea  of  the  adver- 
tising paying  for  itself,  by  means  of  creating  a  larger  volume  of 
sales  and  thus  decreasing  manufacturing  costs,  sounds  good 
from  a  glib  tongue,  but  figure  it  out  for  yourself.  Improved 
machinery  and  modern  production  economies  have,  of  them- 
selves, reduced  manufacturing  costs,  and  this  saving,  which 
should  go  to  you  and  to  your  customers,  is  eaten  up  in  huge 
advertising  and  selling  costs. 

"Don't  be  cajoled  into  handling  the  nationally  advertised  line 

on  the  argument  that  it  is  easier  and  less  expensive  to  sell  an 

advertised  brand.     That's  only  a  bait.     And  this  is 

CaU^      why:   the  circulation   of   the   magazines   is   greatly 

aB^U     scattered,  outside  of  some  big  cities,  and  it  isn't 

possible  for  you  to  build  up  any  such  sales  as  the 

advertiser  would  have  you  believe.     Sales  do  result,  naturally, 

but  not  m  any  such  volume  or  with  any  such  profits  as  will 

make  the  benefit  to  you  square  up  with  the  cost  of  this 

work. 

"Now,  then,  suppose  you  don't  *make  good'  with  an  adver- 
tised line.  It  is  taken  away  from  you.  What  happens?  You 
have  told  the  people  of  your  town,  over  your  own  name,  that 
you  believe  in,  and  want  them  to  believe  in,  the  clothing  you 
handle,  and  then  you  have  to  take  it  all  back.  You  don't  sell 
that  brand  any  more.  Thus  you  lose  the  confidence  not  only 
of  all  the  people  in  your  town,  but  also  of  your  regular  customers. 
Another  thing:  your  competitor  may  get  the  line  that  was  taken 
away  from  you  and,  since  you  subscribed  to  that  line's  goodness 
in  your  local  advertising,  your  customers  may  lose  confidence 
in  you  and  switch  their  trade  to  your  competitor's  store. 
It  has  happened.  You  are  pretty  well  boxed  up,  aren't 
you? 

"The  style  books  which  the  advertiser  offers  you— free  or  at 

'cost  price,'  according  to  how  he  can  work  it  in  each  indi\4dual 

case — are  sent  out  to  your  customers  and  you  pay  the 

Says      postage  on  them.    But  we'll  waive  that — that's  only 

Retailers    ^  moucy  loss.    What  else  have  you  done?    You  have 

Ad^eHisers  ^^^  ^^"^  ^^^^  ^^  customcrs  to  the  manufacturer  for 

Promotion  whatever  use  he  may  want  to  put  them  to— names 

Work      which  are  the  very  backbone  of  your  business  and 

which  the  manufactiu-er  may  have  no  hesitancy  in 

supplying  to  your  competitor,  should  business  relations  between 

you  cease.     Then  the  whole  book  is  chock-full  of  the  manufac- 


548 


4 


I 


TRADE]V1\RKS  AND  BRANDS 


turer  s  advertising;  and,  since  you  pay  the  postage,  you  are  per- 
mitted to  have  your  name  imprinted  upon  the  books— imprinted 
not  as  prominently  as  you  would  like  to  have  it,  but  only  as  larce 
as  the  manufacturer  sees  fit. 

"  Your  window  space  is  worth  money,  isn't  it?    Whose  clothes 
and  posters  do  you  advertise  in  your  windows?     Your  own,  a^ 
a  reliable  merchant?    Or  the  manufacturer's,  as  his  distribut- 
ing clerk?    That's  about  enough  for  that. 
Jlt^-  now    what  becomes  of  all  the  money  you  spent  in 
advertising  a  branded  clothing-should  the  line  be  taken  away 
from  you.^    You  lose  it  ureparably;  and  you  lose  the  good  will 
and  confidence  of  your  public  with  it,  most  likely.     Money 
invested  m  advertismg  should  be  a  distinct,  cumulative  asset 
to  you  m  your  own  business.     Is  it?    On  the  contrary,  it  is  a 
loss,  and  more,  because  it  turns  into  a  chronic  liability 
♦u-  f^^}^  ^^^  T^  of  the  whole  matter— and  the  more  you 
think  seriously  about  it,  the  stronger  you  wiU  agree  to  it;  cut 
A  Close   r*.^^^  advertised  line  of  clothing;  be  your  own  boss; 
Personal   ^  independent;  don  t  lean  on  anybody;  tie  up  to  a 
Appeal    good,  reliable  clothmg  manufacturer  who  sells  a  line 
of  worthy,  dependable  goods;  capitalize  your  own 
personality;  capitalize  the  good  will  and  confidence  and  prestige 
which  you  enjoy  in  your  town  with  your  customers  and  with 
others;  make  people  feel  that  because  you  sell  the  goods  they  are 
worthy;  teach  people  to  rely  upon  your  personal  advice  and 
judgment  in  matters  of  merchandise;  develop  the  personal  note- 
strengthen  your  own  individuality  and  that  of  your  store  by 
instilling  into  folks  mmds  that  you  are  responsible.     Buy  good 
clothing.     Put  your  own  label  on  it.     Then  advertise  it,  and 
your  store  and  yourself  persistently.     That's  how  big  successes 
are  bemg  made  to-day— and  that's  how  the  biggest  retail  sue- 
cesses  are  going  to  be  made  to-morrow." 

If  you  imagine  that  that  is  putting  it  pretty  strong,  there  are 
certam  dealers  who  will  undertake  to  correct  your  impression 
1  hose  are  only  some  of  the  arguments  which  are  being  put  forth 
by  manufacturers  of  unbranded,  unadvertised  clothing,  shirts 
shoes  and  most  everything  which  is  sold  through  retail  stores* 
And  It  is  a  form  of  competition  which  will  have  to  be  fought  in 
two  ways— out  in  the  open  and  in  the  dark. 

The  reader  will  understand  that  the  writer's  energies  and 
sympathies  are  enhsted  on  the  side  of  trademarked,  advertised 
merchandise.    But  what  is  the  answer? 


TRADEMARKS  AND  BRANDS 


549 


The  following  article  was  written  at  that  time  by  Richard 
H.  Waldo,  of  Good  Housekeeping  Magazine,  New  York,  and 
now  of  the  New  York  Tribuney  and  was  printed  as  a  partial 
reply  to  these  arguments. 

The  resourceful  attack  of  a  hypothetical  private  brander 
upon  manufacturers'  co-operation  is  amusing  to  one  who  knows 
how  eagerly  their  skilled  aid  is  sought.  In  eveiy  part  of  the 
country,  and  in  every  line  of  business,  the  progressive  retail  mer- 
chant advertises  not  only  because  he  must  but  because  he 

wants  to. 

This  was  not  true  a  few  years  ago,  but  many  forces  have 
made  it  a  vital  fact  of  to-day.  He  buys  space  freely,  but  the  job 
of  filling  it  is  a  self -renewing  nightmare — unless  the  really  clever 
service  of  the  great  national  advertisers  is  fully  utiUzed.  The 
development  of  this  service  is  in  its  infancy,  but  it  is  simply 
invaluable  to  the  local  merchant  now. 

Thus  aided,  he  learns  how  to  get  the  turbine-wheel  of  his 
own  business  out  into  the  rushing  stream  of  national  adver- 
tising— a  stream  that  flows  through  every  city,  town,  and  village 
on  this  continent  north  of  the  Rio  Grande.  The  way  in  which 
the  early  men  in  each  locality  make  this  hook-up  lift  their 
yearly  profits  is  really  wonderful. 

These  observations  are  particularly  suggested  in  considering 
the  well-built  man  of  straw  set  up  by  Mr.  Savage.  In  the 
latter's  readable  article  one  observes  how  one  pretty  argument 
against  trademarked  goods  demolishes  another.  The  dealer 
is  told  in  a  breath  that  the  "Margin  of  profit  is  cut  veiy  close 
to  the  bone,"  and  in  the  next  he  is  warned  that  the  "manu- 
facturer can  drop  you  like  a  burned-out  match  when  you  fail 
to  satisfy  him  in  the  matter  of  sales."  If  the  first  proposition 
were  true,  wouldn't  the  second  be  covered  by  "I  should 
worry?" 

The  essential  idea  of  the  co-operative  value  of  national  adver- 
tising to  the  dealer  has  been  summed  up  in  a  few  words  by  one 
of  the  best-known  merchants  in  the  country.  When  asked  by 
Men's  Wear  (New  York)  why  he  advertises  as  he  does,  he 

replied: 

"Three  years  ago  I  sold  $700,000  annually.  To-day  I  am 
selling  $1,000,000.  Part  of  this,  not  all  of  it,  is  due  to  the 
fact  that  I  sell  and  advertise  Hart,  Schaffner  &  Marx  goods. 


^0 


TRADEMARKS  AND  BRANDS 


TRADEMARKS  AND  BRANDS 


551 


My  name  on  my  store  m  my  town  is  worth  a  lot  more  than 
theirs;  I  could  sell  it  for  $250,000.  But  their  name  on  their 
clothes  is  worth  a  lot  more  than  mine.  My  customers  know  I 
do  not  make  cothes.  and  the  name  of  Hart,  Schaffner  & 
^larx  on  the  clothes  answers  every  question  any  man  might 
be  mchned  to  ask.  The  combination  of  my  name  on  my 
store  and  their  name  on  my  clothes  in  my  town  cannot  be 

If  the  above  does  not  conclusively  answer  the  arguments  of 
the  pnvate  brander,  I  can  show  letters— additional  corrobora- 
f  {r.!f -1  f^'f  conyincing  testimony-from  successful  men  in 
the  retail  trade.  All  of  them  have  had  experience  with  private 
^ds  ^         ^^  ^^^  making  money  from  advertised 

«w  ^'  y^^'^.t"'  ^?T»  ""^  ^^^^'  N^^-  '•a^ed  at  $35,000,  says: 

We  prefer  the  quicker  turnover  on  advertised  brands  every 
tmie.  It  IS  too  hard  to  move  the  unadvertised.  We  tried  our 
own  private  label  for  a  while  but  it  was  a  failure." 

Grove  &  Bro.,  who  run  a  general  store  rated  at  $35,000  in 
J^uray,  Va.,  feel  the  same  way.  They  write:  "We  find  that 
ilPnT  ''Ia''  TP\^  our  local  advertising  with  national  adver- 
tismg.  Advertised  goods  sell  much  more  readily  with  us  than 
our  private  brands  ever  did." 

J.  S.  Botts  Advertising  Manager  of  the  Geo.  A.  Ducker 
J^ompany,  Joliet,  111.,  can  answer  inquiries  regarding  private 
brands  as  well  as  any  man  I  know.  He  took  up  the  advertised 
goods  idea  at  my  suggestion  some  two  years  ago,  and  he  fre- 
quently makes  me  blush  by  coming  in  to  thank  me.  As  his 
house,  which  is  rated  at  $^00,000,  does  a  business  of  over  half  a 
"'^  ^^^^^y  m  department-store  lines,  I  value  his  testi- 
™^y-     He  will  send  it  to  any  one  who  asks. 

E.  H.  Leonard,  the  Sales  and  Advertising  Manager  of  the  J.  L 

two  weeks  exposition  of  nationally  advertised  goods.  Here  is 
the  most  elaborate  and  far-reaching  piece  of  co-operative  work 
that  has  ever  come  to  my  attention.  With  his  own  experience 
m  handling  private  brands,  Mr.  Leonard  couples  that  of  his 

.te.nf  '\'%T^^^^  "^'^^'^  $1,000,000."  Their  combined 
jud^ient  as  to  the  future  course  of  merchandising  can  hardlv 
fail  to  be  impressive-even  to  those  manufacturers  who  cling 
desperately  to  private  branding  because  they  see  in  it  their  last 
forlorn  hope  for  survival  without  advertising. 


The  Michigan  Tradesman  covers  the  situation  admirably  in 
a  letter  from  a  druggist,  who  writes: 

"I  had  a  man  here  from  Philadelphia  the  other  day 

j^  \  ,    with  a  line  of  fine  goods  to  be  sold  under  my  own  name, 

TZiSnony  ^^^H  Packages  and  up  to  the  class  I  would  have  to 

handle  or  lose  my  trade.     He  talked  profits  and  the 

strength  of  having  my  own  name  on  the  labels.     True,  I  can 

sell,  and  do  sell,  a  lot  of  my  own  brands,  but  to  get  down  to 

prices,  the  chap  with  the  Philadelphia  lines  has  but  a  small 

margin  better  than  many  of  the  most  heavily  advertised  goods." 

This  druggist  then  goes  on  record  as  favoring  a  large  number 

of  sales  at  a  small  profit,  and  that  is  the  keynote  of  thfe  entire 

situation.     It  is  not  possible  to  ignore  popular  demand,  with  the 

cost  of  doing  business  given  even  casual  attention.     Showing 

exactly  what  this  cost  is,  the  volume  of  sales  that  each  clerk 

must  make  is  beautifully  brought  out  in  a  letter  from  C.  F. 

Adams,  of  Gardner  &  Adams,  Salt  Lake  City,  recently  printed  in 

Men's  Wear.    Of  these  sales  Mr.  Adams  said: 

"  If  you  get  no  other  revenue  from  a  salesman  than  just  from 
his  sales,  and  his  salary  is  $10  per  week,  in  order  to  earn  5 
per  cent.,  he  must  sell  $13,000  per  year;  to  earn  $15  per  week  he 
must  sell  $19,500;  $18,  $23,400;  $20,  $26,000;  $30,  $39,000; 
$35,  $45,500.  The  salesman  does  not  in  modem  business  trade 
on  the  generosity  of  his  employer;  by  his  individual  efforts  he 
raises  his  own  salary." 

With  the  necessity  of  making  such  a  volume  of  sales  staring 
him  in  the  face,  is  it  any  wonder  that  live-wire  clerks  are  pushing 
advertised  goods,  and  urging  their  bosses  to  drop 
private  brands?  Time  is  a  tremendously  important 
factor  in  retailing.  A  large  corset  manufacturer 
lately  brought  out  a  booklet  quoted  by  the  Corset  and 
Undencear  Review  (New  York),  showing  that  the 
buyer  who  handles  $1,000  worth  of  trademarked  corsets,  turn- 
ing her  stock  six  times  a  year,  makes  $315  more  than  if  she 
featured  a  special  brand  exclusively. 

Women  have  been  =c  well  educated  by  advertising  nowadays, 
and  attach  so  much  importance  to  the  maker's  and  the  maga- 
zine's guarantee,  that  the  battle  may  be  said  to  be  fairly  won  for 
the  advertiser  as  against  the  private  brand;  and  the  sooner  the 
remaining  stores  see  this  the  sooner  they  will  get  the  big  figures 
on  the  right  side  of  the  ledger. 
Even  in  the  grocery  line,  where  private  brands  have  flourished 


Clerks 

Must 

SeU 

Volume 


652 


TRADEMARKS  AND  BRANDS 


TRADEMARKS  AND  BRANDS 


553 


I'll! 


•i 


"  I 


S  T^^  ^p^  ^"*J  ?.*''*'"^'  V^J  '«  '^'"g  t^ken  of  the  mat- 
ter.  The  New  England  Grocer  and  Tradesman,  the  pioneer  trade 
paper  to  systemaUcally  urge  retail  merchants,  for  their  o^  sake 

t^e^tr«r«  °"* W^'r^'^'^  merchandise,  tells  us  thatTtaktg 
the  trade  as  a  whole  the  profits  are  better  on  nationally  ad- 
vertised goods  and  when  the  grocer  considers  the  volume  of 
these  goods  which  he  can  sell  and  the  ease  with  which  the  sales 

^st'"d:tipMor^*  '^'^''  ''"''  ''^'  -  -ney-makers'^ft: 
From  another  angle,  O.  E.  Carman,  in  Hardware  Trade  (Minne- 
apolis)   relates  cases  proving  that  merchants  cann^  affoTto 
vefustg     °PP°'-^'^'^'««  ''^'^^  ^^  given  them  by  natrond  ad- 

cit7  '^Thl^.t"'"*'  ^^^r^  °^  *.  ■***''  paint  store  in  an  Eastern 
what  J^hr^^""  w«s  doing  only  a  fair  business-nothing  Hke 
what  It  should,  considering  its  location.  The  store  was  per- 
suaded to  buy  an  advertised  line  and  to  push  it.  Thlres^L 
were  surprising.  Sales  were  large  on  this  'new  line.'  The  store 
was  fully  won  over  to  advertised  goods. 

of  th^rJ:^  in  IheTorl?"'*''^  ^^  ^'«^^^  °^  '^^  '^''^'^  «  ^  "^^ 

carted°foT  ™  ^"h  ^^°  -^"i^ru""*  *°  advertised  line  he  had 
htm  riitlt    ^m^u-    ^^  fancied  the  company  was  not  treating 
|um  right.    Withm  a  couple  of  months  he  found  that  his  cu": 
tomers,  no  longer  able  to  get  that  advertised  article  f rom  h^ 
were  gomg  across  several  miles  to  buy  it  in  another  town     Th"n 

?n  KTlic?^'  "  ''^  ''''''  ""'  ^^^  ''^^-    He  wasn't  lonj 

DaSt^^m^V^  ^'^  Stor«fceepjni7,  m  reading  hundreds  of  trade 
papers  to  make  excerpts,  are  compelled  to  notice  that  these 

Protective  ^f 'f  "^l^^T^  measure,  recognize  the  solid  merits 

Feature  of  °^  t^f Remarked,  advertised  goods    from    the    con- 

Brandrd   servative  merchant's  standpoint,  while  some  errors 

which  C*  r  ^3"^  i  advertising  manufacturers 
which  have  alienated  dealers  ate  spoken  of  lareelv  as 

SfeLgo).^*-  ^'"^  "^^  '""^  ^"'^""^  Jeweler'Ap. 
"Manufacturers  generally  have  come  to  realize,  on  the  on^ 
hand,  that  false  values,  although  backed  by  mich  advertisZ 
and  a  trademark,  open  wide  the  door  of  competition  and  sih 
stitution;  and,  on  the  other,  that  they  cannot  e?^ct  to  eain  the 
interest  and  co-operation  of  the  retaL  in  thei?businesf  ^less 


J 

! 


they  are  willing  to  make  it  worth  his  while.  With  these  essen- 
tials generally  understood  alike  by  manufacturer  and  dealer,  no 
'trademark  problem'  need  present  itself.  Other  things  being 
equal,  the  retailer  stands  to  profit  by  handling  trademarked 
goods,  and  in  his  own  interest  and  the  interest  of  the  public  he 
serves  he  should  insist  upon  the  assurance  and  protection  that 
the  trademark  of  a  manufacturer  affords." 

Aptly  summarizing,  the  Retailers  Men's  Apparel  Magazine 
says: 

"The  retailer  who  ignores  the  powerful  influence  of  adver- 
tising is  completely  out  of  tune.  That  advertising  has  brought 
about  a  stable  condition  in  buying  and  selling  is  apparent  at 
every  turn.  Your  newspapers  and  magazines  offer  ample  evi- 
dence. Whether  it  be  an  incubator,  a  thresher,  a  breakfast 
food,  a  collar,  or  a  cigar — people  want  to  buy  and  duplicate  by 
name.     They  don't  want  nameless  unknowns. 

"  Retailing  of  advertised  goods  is  f rictionless.  The  advertised 
brands  are  called  for  by  name — there's  no  dickering,  no  uncer- 
tainty to  buyer  or  seller;  the  sale  is  closed  quickly.  The  popu- 
larity of  advertised  goods  and  the  desire  of  consumers  to  know 
where  the  goods  are  on  sale  has  led  a  large  number  of  retailers 
to  place  in  their  windows  a  bulletin  of  the  brands  they  carry. 

"Additional  profit  in  advertised  goods  lies  in  the  time  saved 
waiting  on  customers,  and  the  possibility  of  still  greater  profit 
lies  in  the  fact  that  you  can  carry  a  wide  variety  of  makes,  a 
small  stock  of  each,  and  thereby  be  in  a  position  to  serve  a 
greater  number  of  men  of  varied  tastes. 

"  Every  sale  means  a  profit — at  the  beginning  or  the  end  of  a 
season — and  there's  no  need  of  retailers  stocking  heavily  with 
advertised  goods.  Manufacturers  and  jobbers  are  ready  to 
promptly  supply  retailers  in  such  quantities  as  suit  their  needs." 

There  is  milk  in  that  cocoanut.  The  fact  that  small  stocks 
of  advertised  goods  can  be  and  very  generally  are  carried  has 
much  to  do  with  the  fact  that  we  are  going  through  a  "psycho- 
logical depression  "  instead  of  a  panic.  A  writer  in  the  New  York 
Tribune  almost  grasped  this  truth  when  he  said:  "All  reports 
point  to  the  conclusion  that  we  are  passing  through  the  dullest 
times  in  business  that  we  have  experienced  in  years.  That 
there  is  no  glaring  evidence  of  this  is  due  to  the  fact  that  we  have 
come  to  this  condition  gradually  and  not  by  the  usual  step  of 
panic.  Instead  of  falling  over  the  precipice,  as  we  generally  do 
in  America,  as  the  result  of  an  explosion,  we  have  climbed  grad- 


554 


TRADEMARKS  AND  BRANDS 


"I 


I . 


11 


Sdte  tl^t  f  '^'  -1* •.  ^"^^\^^  g-^^  have  been  re- 
out  of  the  Sh  If  ;i„  "  P^'"  "^""^  '""'=''  ^*"g«'  ^^  been  taken 
out  Of  the  situation,  producing  a  conservation  of  7redit  which 

keeps  such  tremendous  breaks  as  the  Claflin  failure  ft^mDarl 
lyzmg  the  situation  with  fear,  which  is  the  forerunner  of  ofdc 

deJferr"i"vl^"'Jf """  ^^*  '^'  '^t'  "^  ''^  investigationTat  a 

aX^rpSeTatTcTA^ntiil  l^^t'  '  '"^'^- 
placed  before  me.  competition  until  these  figures  were 

S^n,>Eca^     The  opinions  of  1,463  well-rated  reteil  merchants 
'S:/£j2S^"l,$he   United  States  were  obtabed-^e't 

goods,  32  mu£      ■  ^'  ^^:  '"  ^'^'y'  '"'  i^''^^'  222  diy- 


Hardware 
Drugs 
Grocers 
Jewelry 

Drygoods  and  General  Store 
Music 

Averages  all  opinions 


FAVOR 
PRIVATE  BBANDS 

4% 
9% 
7% 
2% 
6% 
7% 
6% 


PAVOR 
ADVERTISED  QOOOS 

91% 
93% 

98% 
95% 
93% 

94% 


veSsedti?  ^^'^'  ^"^'^arized  the  reasons  for  selling  ad- 

*'  Saves  time  of  salesman." 
"Much  easier  sold." 
"Better  quality  assured." 
^  Fresher  stock." 
"People  ask  for  them." 

"Sh'nw  r""'  have  confidence  in  advertised  goods." 
« ^how  bigger  profits  at  end  of  year." 
Kapid  turnover." 

Ji  ^ZrXirl  teateCds  '^"^  ^"^^  ''''^'  '^^^ 
You  may  say  that  you  hear  nothing  of  this.    Quite  so     Whv 


CHAPTER  XIV 


ADVERTISING  STANDARDS 


THERE  is  no  better  evidence  that  those  who  are  engaged 
in  the  various  branches  of  advertising  appreciate  the 
responsibility  which  modern  conditions  have  put  upon 
them  than  is  to  be  found  in  the  efforts  being  made  to  raise  adver- 
tising standards.  These  efforts  are  in  part  individual,  being 
made  both  by  advertisers  and  by  sellers  of  space,  and  in  part 
they  represent  association,  or  club  activities.  The  most  con- 
spicuous among  the  latter  are  the  efforts  of  local  clubs  to  raise 
standards  locally,  and  of  the  Associated  Advertising  Clubs  of 
the  World  to  raise  standards  in  two  directions:  first,  by  attack- 
ing fraudulent  advertising  through  its  Vigilance  Committee, 
and,  second,  by  raising  the  tone  of  honest  advertising  through 
the  constructive  efforts  of  its  National  Commission. 

Growing  out  of  these  national  efforts  there  has  come  a  codi- 
fication of  standards  of  practice  for  different  lines  of  adver- 
tising efforts  which  represent  one  of  the  most  impressive  cases 
on  record  of  attempts  to  put  down  in  words  a  code  of  ethics  to 
serve  as  a  guide  to  those  who  are  anxious  to  keep  a  business  on 
the  highest  possible  plane. 

In  addition  to  all  of  these  voluntary  efforts  to  raise  advertising 
standards,  there  has  been  some  progress  made  in  expressing  in 
the  form  of  law  the  desire  to  protect  public  interests.  These 
laws  are  directed  against  those  who  attempt  to  abuse  the  power 
over  demand  which  they  may  be  able  to  develop  by  advertising. 

Within  the  limits  of  this  volume  it  will  be  impossible  to 
discuss  adequately  the  individual  efforts  which  are  being  put 
forth  to  raise  the  standards  of  advertising  practice.    There  are 

555 


i: 


M 


556  ADVERTISING  STANDARDS 

numerous  ca^s  in  which  we  find  individual  advertisers  taking 
the  position  that  the  only  safe,  as  well  as  the  only  moral,  method 
to  pursue  .s  for  Uiem  to  adopt  and  scrupulously  observe  stand- 
ards of  truth  and  smcerity  which  are  unimpeachable.  At  the 
same  time,  a  number  of  pubUshers  have  come  to  the  belief  that 

IkTwTT  '"  """^''  \"°*  *  '"«*'•  '^^P^n^ibility  for  the  mate- 
rial which  appears  m  their  advertising  columns,  and  we  have 
such  mstances  as  the  Farm  Journal  of  Philadelphia,  and  the 
publications  of  the  Curtis  Publishing  Company,  and  many 
others  which  exercise  a  strict  censorship  over  the  copy  going 
mto  advertisements  which  they  print.  In  connection  with  such 
activities  as  this,  some  effort  is  made  to  raise  the  ideas  of  the 
pubhc  as  to  what  It  ought  to  expect  from  an  advertiser  or  his 
.dvertisement^   The  work  which  WiUiam  Freeman  conducted 

bJ^-      n  ^'"^  ^""^^  ^"^^  '"''^  '^'  --k  which  Samuel 
Hopkms  Adams  is  now  carrying  on  in  the  "Ad-visor"  columns 
of  the  New  York  TrUmne  are  examples  of  this  sort  of  activitv 
which  deserves  more  space  than  can  be  given  to  itCTl 
J^juld  be  valuable,  if  spac  permitted,  to'go'so  Jw^rmo^ 
fully  into  the  nature  and  methods  of  these  efforts.     It  wiUb^ 
n««ssa,y  however  to  confine  our  attention  in  this  chapte    t^ 
(1)  the  activities  of  associations  and  clubs  leading  to  the  Son 
tion  of  standards  of  practice  by  the  associated  clubs    a„dS 
he  progre^  which  has  been  shown  in  the  development  J  lei! 
lation  for  the  purpose  of  reguktbg  advertising.  ^ 

(1)    ASSOCIATED  EFFORT 

One  of  the  most  active  local  clubs  in  the  matter  of  attemotins 

tising  Forum.    This  organization,  early  in   1015    recewJ. 
report  from  its  Bureau  of  Fair  Competition,  from  which  thrfol 
lowmg  excerpU  are  taken:  '"  wnicn  the  fol- 

-  ^P  .     •  .  ,  ^     ^   •  "^^  ^  *^*^°  ^^^  suspicion  against  all  adver- 

^Prtnters  Ink,  April  8.  1915.  p.  4S. 


ADVERTISING  STANDARDS  557 

tising  by  eliminating  that  element  which  tends  to  cast  a  doubt  on  the  mtegrity 
of  a  whole  industry.  It  was  the  vigorous  work  of  the  Mmneapolia  Advertising 
Forum  along  these  lines  that  won  for  it  the  Baltimore  Truth  Trophy  .—Ed. 
Printers*  Ink.] 

After  more  than  two  years  of  volunteer  work  this  permanent 
bureau  was  established  in  February,  1914.  (The  Vigilance  Bu- 
reau of  the  Minneapolis  Advertising  Forum.) 

Its  object  \s  to  reduce  the  burden  of  unjustified  suspicion  which, 
through  association  with  careless  or  dishonest  advertisers,  seems 
to  rest  on  all  advertisers. 

Subscribers  to  the  bureau  are  expected  to  request  investiga- 
tions of  all  advertisements  which  they  suspect  contain  state- 
ments that  are  "untrue,  deceptive,  or  misleading,"  and  it  is  the 
duty  of  the  secretary  to  ascertain  the  facts  in  the  case  and,  if 
the  suspicion  is  found  to  be  justified,  to  obtain  the  positive 
assurance  of  the  advertiser  that  the  offence  will  not  occur  again 
or  to  report  the  evidence  to  the  proper  authorities. 

How  great  is  the  burden  of  unjustified  suspicion  carried  by  each 
advertiser  is  hard  to  estimate.  But  some  idea  of  this  encum- 
brance which  advertising  has  been  carrying  may  be  gained  by  a 
study  of  the  facts  revealed  in  the  records  of  investigations  made 
by  this  bureau  at  the  request  of  subscribers  during  the  past  year. 

Since  subscribers  do  not  request  investigations  unless  their 
knowledge  of  merchandise  leads  them  to  suspect  that  statements 
are  untrue,  the  cases  in  which  careful  investigations  show  the 
advertisements  to  be  truthful  may  be  considered  indicative  of 
unjustified  suspicion.  The  proportion  of  the  total  cases  in- 
vestigated but  found  truthful  should,  therefore,  represent  the 
burden  of  suspicion. 

The  efficiency  of  this  bureau  can  be  judged  most  clearly  by 
these  percentages  of  unjustified  suspicion. 

First  quarter,  March  1  to  June  1,  1914,  %5  per  cent.;  second 
quarter,  June  1  to  September  1,  1914,  50  per  cent.;  third 
quarter,  September  1  to  December  1,  1914, 19  per  cent.;  fourth 
quarter,  December  1,  1914.  to  March  1,  1915,  17  per  cent. 

If  the  above  figures  indicate  the  unjustified  suspicion  in  the 

mmds  of  subscribers  themselves,  who  are  familiar  with  mer- 

Numher    chandise  and  prices,  it  is  interesting  to  speculate  on 

of  Cases  what  this  burden  must  be  in  the  minds  of  the  purchas- 

gcUed'    ^?^  public,  who  cannot  be  expected  to  discriminate 

^  clearly,  but  may  simply  suspect  advertisements  and 

turn  away  from  them. 


558 


ADVERTISING  STANDARDS 


11 


During  the  year  the  bureau  investigated  192  eases  distributed 
amongst  various  classes  of  business  as  follows: 

Auctions t 

Clothing  Stores  (men's) 20 

(^lothing  Stores  (women's)    S 

Dairies   1 

Decorators 2 

Department  Stores 23 

Florists 2 

Furniture  Stores 14 

Furriers    6 

Fortune  Tellers 3 

(irocers 3 

Hardware  Stores 1 

Horse  Dealers 1 

Help  Wanted  Ads 2 

Jewelers 18 

Medicine  Companies 34 

Magazine  Agencies 1 

Music  Dealers 5 

Meat  Markets 3 

Mail-order  Houses   5 

Opticians   2 

Piano  Dealers   10 

Publishers 3 

Public  Ser\'ice  Companies 3 

Rug  Dealers 2 

Schools  8 

Shoe  Stores 13 

Sporting  Goods  Stores 1 

Tailors 5 

Theatres 1 

Wholesalers 1 

It  will  be  seen  from  the  above  that  hardly  any  class  of  retail 
business  has  escaped  suspicion. 

Of  these  192  cases,  64  investigations  show  the  advertiser  to 
be  correct  in  the  statement  suspected,  making  the  average  an- 
nual burden  of  suspicion  331  p>er  cent. 

Of  the  remaining  128  cases,  in  68,  or  over  half  of  them,  the 
bureau  secured  immediate  co-operation  in  the  correction  of  the 
faulty  statements — an  interesting  demonstration  of  the  inad- 
visability  of  rushing  into  the  courts  before  every  other  means  is 
exhausted. 

In  22  other  cases  favorable  progress  was  made.  In  11  cases 
no  definite  results  were  obtainable,  although  it  is  felt  that  the 
moral  effect  of  the  investigations  served  to  make  the  advertisers 


ADVERTISING  STANDARDS  650 

more  careful  and  probably  prevented  further  misstatements.  In 
three  cases  untruthful  and  deceptive  advertising  was  prevented 
before  the  copy  was  published. 

Five  prosecutions  have  been  necessary,  and  the  following  re- 
sults have  been  obtained  : 


Prosecution 


1.  A  horse  dealer  was  convicted  and  fined  $50. 

2.  A  warrant  was  issued  for  the  arrest  of  a  special 
sales  agent  and  he  fled  the  city  before  the  warrant  could  bo 
served.     The  sale  was  discontinued. 

3.  A  salesman  of  bottled  ink  was  arrested  on  the  charge  oi 
fraudulent  advertising,  but  escaped  conviction  through  a  legal 
technicality. 

4.  The  proprietor  of  a  men*s  clothing  store  pleaded  guilty  to 
the  charge  of  untruthful  advertising  and  was  fined. 

5.  Another  men's  clothing  company  has  been  arrested  and  the 
case  has  been  set  for  2  p.  m.,  April  2nd,  before  Judge  E.  A. 
Montgomery.  This  corporation  is  said  to  be  planning  to  attack 
the  constitutionality  of  the  law.  The  bureau  has  placed  the 
case  in  the  hands  of  Brooks  &  Jamieson,  attorneys,  of  Minne- 
apolis, and  is  being  supported  financially  by  the  National 
Vigilance  Committee  of  the  Associated  Advertising  Clubs  of 
the  World.  The  National  Committee  has  retained  as  advisory 
counsel  Harry  D.  Nims,  of  New  York  City,  author  of  "Unfair 
Competition'*  and  of  the  Minnesota  law  to  prevent  fraudulent 
advertising. 

The  bureau  has  assisted  the  Minneapolis  Retailers'  Associ- 
ation to  get  evidence  of  violations  of  the  Transient  Merchant 
Act  and  other  matters  which  might  be  considered  as 
Jf^^^^-A  unfair  competition.     Two  itinerants,  arrested  on  in- 
tonwi^/i^  formation  which  the  bureau  helped  to  secure,  "jumped 
Retailers*  bail"  and  fled  the  city  before  being  tried. 
Association      Evidence  obtained  by  the  bureau  led  to  the  arrest 
of  15  merchants  in  the  Bridge  Square  and  Washington 
Avenue  district  on  the  charge  of  soliciting  business  on  the  side- 
walk, commonly  called  "roping  in."     The  constitutionality  of 
the  city  ordinance  prohibiting  this  practice  was  attacked.     The 
ordinance  was  sustained  by  the  Municipal  Court  and  the  de- 
fendants have  carried  their  case  to  the  Supreme  Court. 

Chambers  of  Commerce  as  well  as  Advertising  Clubs  have 
from  time  to  time  undertaken  vigilance  work,  and  the  following 


seo 


ADVERTISING  STANDARDS 


n 


account  of  the  work  done  by  the  Vigilance  Committee  of  the 
Advertising  Division  of  the  Chamber  of  Commerce  of  Indian- 
apolis, as  reported  by  Carl  Hunt,  editor  of  Associated  Adver- 
tising, illustrates  what  an  organization  of  this  kind  has  been  able 
to  achieve: 

*u*^i^r^M^  ^  attempt  to  describe  a  series  of  advertisements  which 
the  Vigilance  Committee  of  the  Advertising  Division  of  the 
Chamber  of  Commerce  at  IndianapoHs  has  been  publishing  with 
the  hope  of  creating  a  desire  for  better  things  in  local  advertising. 
It  would  be  well  to  mention  briefly  the  policies  of  the  Indian- 
apolis committee. 

«T^^-^"^^^°r^^^!^  t^e  method  of  operation  has  been  called  the 
Indianapolis  plan."  In  a  large  measure  the  committee  has 
assumed  a  judicial  attitude,  holding  itself  ready  and  willing  to 
investigate  matters  brought  to  its  attention.  It  has  seldom 
taken  the  initiative  absolutely,  though  in  a  few  cases  this  has 
been  done. 

Complaints  have  come  chiefly  from  competitors  of  the  adver- 
tisers, whose  methods  have  been  complained  of  and  some  of  the 
complaints  have  come  from  representatives  of  mediums. 

Early  in  its  existence  the  committee  issued  a  folder  to  Indian- 
apolis advertisers  generally— taking  its  mailing  list  from  the 
ledger  of  one  of  the  newspapers.  This  folder  set  forth  the  gen- 
eral puiposes  of  the  committee  and  asked  advertisers  for  their 
tmancial  co-operation,  inviting  them  to  subscribe  upon  the  basis 
that  their  advertismg  would  pay  them  better  in  proportion  to 
whatever  general  improvement  in  advertising  could  be  ac- 
complished.    A  paragraph  from  this  circular  was  as  follows: 

You,  hke  all  other  advertisers,  will,  we  believe,  want  to  do 
all  you  can  to  help  us  clean  up,  for  you  no  doubt  know  that 
soniethmg  hke  80  per  cent,  of  the  people  still  say,  when  they 
read  any  kind  of  advertisement,  *0h,  it*s  only  an  advertisement!* 
In  other  words,  only  20  per  cent,  read  advertisements  with  the 
proper  respect  for  advertising.  Yet,  even  in  the  face  of  this 
great  loss  of  prestige,  advertising  pays." 

The  committee  is  just  now  ready  to  send  out  a  second  appeal 
for  funds  based  upon  what  it  has  done,  and  through  the  interest 
which  ha^  been  manifested  in  the  committee's  work  it  seems  that 
there  will  surely  be  no  difficulty  in  financing  it. 

^Prinieri  Ink,  December  31,  1914,  p.  47. 


ADVERTISING  STANDARDS 


561 


Probably  the  most  remarkable  indication  of  all  has  been  the 
willingness  of  the  newspapers  of  Indianapolis  to  co-operate  by 
giving  the  committee  advertising  space  for  the  pur- 
Nnospapers  ^^^  ^^  exploiting  the  value  of  truth  in  advertising. 
Co-operate  ^^^^  ^^^^  remarkable  to  me  from  the  fact  that  the 
appearance  of  the  advertisements  is  of  itself  an  admission  on  its 
face  that  some  advertising  is  untrue — and  where  was  there  a 
newspaper  ten  years  ago  which  had  the  courage  to  make  such 
an  admission?     Certainly  this  is  a  good  indication. 

This  co-operation  of  newspapers  has  been  willingly  given  in 
spite  of  the  further  fact  that  the  operations  of  the  committee 
have  in  several  cases  temporarily  reduced  the  space  which  ad- 
vertisers contemplated  using. 

All  of  the  advertisements  the  committee  has  used  in  the  In- 
dianapolis newspapers  have  contained  the  following  statements, 
in  effect: 

"The  Vigilance  Committee  of  the  Chamber  of  Commerce, 
whose  aim  is  to  foster  truthfulness  and  stamp  out  misrepre- 
sentation in  advertising,  meets  each  Monday  noon — 12:15 — at 
the  Chamber  of  Commerce,  to  hear  complaints  against  untruth- 
ful or  misleading  advertisements." 

I  am  going  to  quote  from  some  of  the  advertisements  as  they 
have  appeared.  One,  under  the  heading  of  "Poetic  Justice," 
was: 

"Oftener  than  otherwise  *  poetic  justice'  is  visited  upon  an 
advertiser  who  attempts  to  misrepresent  or  mislead.  He  may 
fool  some  of  the  people  for  a  little  while,  but  he  cannot  fool 
enough  people  long  enough  to  make  it  pay.  Sooner  or  later 
— usually  sooner — ^he  finds  that  justice  has  been  done-^that  he 
has  brought  himself  troubles  in  proportion  to  the  deceit  which 
he  has  attempted.  He  finds  his  truthful  competitors  growing 
and  prospering  while  he  is  standing  still  or  going  backward. 
Truth  pays." 

Another,  somewhat  similar,  but  a  little  more  cheerful  perhaps, 
was: 

"Most  advertising  is  true,  because  the  advertiser  who  sur- 
vives is  the  advertiser  who  does  tell  the  truth,  and  those  who 
would  *put  something  over'  on  the  people  do  not  usually  last 
long  or  prosper.  Truthful  advertising,  properly  persisted  in, 
and  backed  up  with  consistently  good  service,  pays  large  divi- 
dends. The  truthful  advertiser  grows  and  prospers.  He  is 
happy." 


562 


ADVERTISING  STANDARDS 


ADVERTISING  STANDARDS 


563 


^ 


Still  another  along  the  same  general  line  was: 

"The  customer  who  comes  as  the  result  of  a  proper,  truthful 
advertisement,  and  finds  the  things  or  service  which  are  oflFered 
for  sale  to  be  equal  to  their  description,  will  come  again  and 
again.  Such  a  customer  will  recommend  the  advertiser  to  his  or 
her  friends.     Such  advertising  counts — it  builds  business.'' 

Some  of  the  copy,  particularly  at  times  when  the  newspapers 
have  published  accounts  of  prosecutions,  has  had  the  idea  of  en- 
couraging people  to  believe  advertising.  This  copy  was  used 
for  the  benefit  of  the  newspapers  and  of  the  square  advertisers 
whose  co-operation  the  committee  has  had.  One  such  advertise- 
ment was: 

"Except  for  the  fact  most  advertising  is  true,  the  untruthful 
advertiser  would  have  no  ground  upon  which  to  stand.  If  all 
advertising  was  imtruthful,  nobody  would  believe  any  of  it. 
The  advertiser  who  has  formulated  a  strict  code  for  his  own 
guidance  and  lives  up  to  it  heartily  is  the  man  whose  advertising 
pays  best  both  at  the  beginning  and  in  the  long  run." 

Two  of  the  advertisements  have  appealed  particularly  to  the 
caution  of  advertisers  who  might  be  inclin^  to  get  "of!  the 
track. ' '    One  of  them  was : 

"An  advertiser  who  attempts  to  fool  the  public  may  well 

expect  his  employees  to  do  likewise.     The  custom  will  grow. 

Sooner  or  later  his  employees  will  fool  him.     Most 

^^     advertising  is  straight.     It  all  should  be." 

1;^^%        The  other  was: 
the  Truth      "Habits  of  dishonesty  grow.    The  advertiser  who 
allows  himself  to  depart  from  the  truth  in  any  degree 
is  on  dangerous  ground.     Most  advertisers,  knowing  this,  ad- 
here strictly  to  the  truth." 

In  another  the  convenience  of  truthfulness  was  argued  in  an 
interesting  way.     It  read  as  follows: 

"The  reason  why  a  man  who  writes  an  untruthful  advertise- 
ment is  almost  always  caught  by  the  customer  is  that  when  a 
man  tells  a  lie  he  has  two  things  to  remember — the  state  of  facts 
as  they  really  exist  and  the  state  of  things  as  he  pretends  they 
are.  The  advertiser  who  tells  the  truth  only  has  one  thing  to 
remember — the  fact  as  it  is.  Truthfulness  in  advertising  breeds 
confidence.  Confidence  on  the  part  of  the  customer  means 
prosperity  to  the  advertiser." 

The  self-interest  of  the  advertiser  was  a  strong  feature  in  an- 
other piece  of  copy,  which  was  as  follows: 


"The  untruthful  advertiser  is  operating  under  a  tremendous 
disadvantage.  It  is  only  when  customers  come  again  and  again 
that  advertising  can  really  pay.     Most  advertisers  know  this." 

Following  the  first  successful  prosecution  of  an  offender,  a 
simple,  straightforward  announcement  concerning  the  case  and 
its  results  was  published  in  display  space,  but  on  another  occa- 
sion— that  of  the  second  successful  prosecution — the  sanie  copy 
was  made  to  carry  the  thought  that  most  advertising  is  true. 
In  part,  this  second  advertisement  was: 

"The  Vigilance  Committee  of  the  Publicity  Division  of  the 
Chamber  of  Commerce  has  in  the  last  few  months  persuaded 
many  overzealous  advertisers  to  eliminate  false  and  misleading 
statements  from  their  announcements.  It  has  successfully  pros- 
ecuted in  police  court  two  firms  that  refused  to  *  clean  up.* 
There  is  now  probably  less  faking  in  advertising  in  Indianapolis 
than  in  any  city  of  its  size  in  the  country." 

It  is  not  now  and  probably  never  will  be  possible  to  trace  direct 
results  to  these  advertisements.  It  has  been  the  thought  of  the 
committee,  however,  that,  persisted  in,  they  could  not  possibly 
help  fromdoing  good,not  only  through  theu-  influence  upon  adver- 
tisers, but  also  on  account  of  their  influence  upon  mediums,  too. 

It  has  been  the  thought  of  the  committee  that  a  newspaper 
which  is  frequently  publishing  advertisements  exploiting  the 
benefits  of  truthfulness  in  advertising  is  a  good  deal  less  likely 
to  accept  off-color  copy. 

These  benefits  are,  of  course,  more  or  less  incidental  because 
the  prime  purpose,  so  far  as  the  hope  for  immediate  results  is 
.  concerned,  was  to  get  people  who  have  complaints  interested 
in  the  work  of  the  committee.    The  advertisements  have  un- 
doubtedly done  this. 

The  Vigilance  Committee  of  the  Associated  Advertising 
Clubs  of  the  World,  through  its  chairman.  Merle  Sidener,  made 
a  report  at  the  Chicago  convention  on  June  21,  1915.  Mr. 
Sidener,  in  the  course  of  that  report,  predicted  that  the  time 
was  near  when  a  paid  staff  would  be  necessary  to  handle  the 
increasing  complexities  of  the  work  of  the  committee,  and  that 
for  two  reasons: 

"In  the  first  place,  there  is  the  growing  demand  for  educa- 
tional material  on  the  part  of  the  individual  clubs,  and  in  the 


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.THIi 


I 


s^nd  place  it  is  becoming  increasingly  difficult  to  reach 
offenders  against  the  truth. 

"The  time  has  come  for  more  action  and  less  talk,"  said  Mr. 
Mdener.  Ihe  time  has  come  when  some  central  body  shall 
place  Itself  m  position  to  speak  with  authority  concerning  the 
truth  or  untruth  of  specific  advertisements.  The  time  has 
come  when  the  publications  have  a  right  to  look  for  guidance 
from  those  who  assume  to  tell  them  they  are  headed  in  the 
wrong  direction.  The  publications  are  entitled  to  the  facts 
about  advertising  which  is  criticised,  rather  than  opinions  and 
suggestions.  The  time  has  come  when  the  advertisers  them- 
selves have  a  nght  to  demand  that  those  who  advocate 
truth  in  advertismg  shall  point  out  the  individual  offenders 
and  not  merely  mclude  a  class  under  generalities.  The  timd 
bas  come  when  this  organization  can  no  longer  depend  on 
fXs  "*     sources    for    information    concerning    frauds    and 

♦The  report  further  speaks  with  appreciation  of  the  better 
understanding  among  business  men  as  to  what  the  vigilance 
movement  really  stands  for,  and  mentions  particularly  the 
action  of  the  Proprietary  Association  of  America  in  endorsing 
the  Pnniers'  Ink  Model  Statute. 

The  work  of  the  past  year  has  naturally  fallen  under  the 
heads  of  education  and  correction.  The  educational  work  has 
been  concentrated  upon  the  development  of  individual  vigilance 
committees  m  the  clubs  and  securing  the  co-operation  of 
publications  and  other  advertising  mediums.  The  original 
series  of  articles  m  Pnnters'  Ink,  in  which  the  vigilance  move-  , 
ment  was  suggested,  were  reprinted  by  permission,  and  given 
wide  circulation  among  the  clubs.  A  special  pamphlet  was 
also  prmted  for  those  clubs  which  were  endeavoring  to  secure 
the  passage  of  the  Printers'  Ink  Model  Statute. 

The  policy  of  using  moral  suasion  wherever  possible,  rather 
than  resorting  to  the  law,  has  proved  its  soundness.  Out  of 
869  investigations  reported  by  thirty-five  individual  clubs,  only 
eleven  prosecutions  were  necessary.  "  Such  cases  were  becoming 
fewer  each  year,  says  the  report.  "  Usually  one  court  action 
in  a  community  has  the  effect  of  keeping  the  would-be  crooked 
advertiser  m  the  straight  and  narrow  path."  The  committee 
^^^^  the  services  of  a  national  detective  agency  in  making 

:    ^Printers  Ink,  June  24,  1015,  p.  06. 


investigations,  and  has  co-operated  closely  with  the  Post-office 
Department. 

"The  foundation  has  been  laid  for  a  'Rogues  Gallery*  of 
fraudulent  advertisers  which  in  time  will  render  a  great  service 
to  the  mediums  which  seek  honestly  to  shut  out  the  fakers," 
said  Mr.  Sidener.  "For  several  months  a  clerk  has  been 
engaged  in  gathering  data  for  this  record,  and  more  or  less 
information  has  now  been  filed  concerning  about  700  different 
advertisers.  The  committee  has  been  compelled  to  deny  an 
erroneous  report  which  has  been  persistently  circulated,  to  the 
effect  that  a  *  directory  of  frauds'  would  be  *  published*  by  the 
committee.  Nothing  is  further  from  the  truth.  This  record 
of  the  transgressions  of  advertisers  will  be  for  reference  only, 
and  confidential  information  will  be  furnished  to  those  who  are 
interested. 

The  constructive  side  of  the  Associated  Advertising  Clubs' 
work  in  attempting  to  raise  advertising  standards  has  taken 
two  definite  forms:  the  creation  of  the  National  Commission 
and  the  adoption  of  the  Standards  of  Practice. 

The  National  Commission  was  authorized  by  the  new  Con- 
stitution and  By-laws  adopted  by  the  Clubs  at  the  meeting 
in  Toronto,  in  June  25,  1914.  The  articles  of  the  Constitution 
which  bear  on  the  creation  and  work  of  this  Commission  are 

as  follows: 

ARTICLE  IV 

MEMBERSHIP 

Section  1.    This  Association  shall  consist  of: 
(a)  Duly  organized  advertising  clubs. 
(6)  Departmental  advertising  organizations. 

Section  2.  Any  advertising  club  may  make  application  for  membership  to 
this  Association,  and  may  become  affiliated  by  the  Executive  Committee. 

Section  3.  Departmental  organizations  representing  specific  interests  of 
advertising  may,  upon  the  recommendation  of  the  National  Conmiission,  be 
affiliated  with  this  Association,  but  only  one  such  department  representing  an 
identical  interest  shall  be  affiliated. 

ARTICLE  VII 

NATIONAL  COMMISSION 

Section  L  There  shall  be  a  National  Commission  composed  of  three  dele- 
gates elected  annually  by  ballot  from  each  affiliated  departmental  organii^tioOv 
said  election  to  be  held  at  the  time  of  the  annual  meeting  of  the  Association,    jt 


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567 


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Section  2.  Until  the  members  of  the  National  Commission  shall  have  been 
duly  elected  in  the  manner  herein  provided,  the  organization  created  at  the 
1913  annual  meeting  of  this  Association,  held  at  Baltimore,  kno^-n  as  the 
"Conference  of  Committees,"  and  composed  of  tliirty-nine  representatives,  three 
from  each  of  the  thirteen  departments  of  advertising  there  represented,  shall 
be  substituted  for  the  National  Commission,  and  shall  have  all  the  duties  and 
authority  thereof.  Upon  the  organization  and  affiliation  of  any  departmental 
organization  represented  in  the  Conference  of  Committees  and  the  election  of 
delegates  to  the  National  Commission  therefrom,  these  delegates  so  elected 
shall  immediately  supersede  the  members  of  the  Conference  of  Committees 
repredesignate,  except  as  herein  otherwise  provided. 

ARTICLE  XIII 

FUNCTIONS  AND   DUTIES  OF   DEPARTMENTAL  OBOANIZATION8 

Section  1.  The  functions  and  duties  of  the  departmental  organizations  may 
be  such  as  their  constitution  and  by-laws  designate,  except  as  therein  otherwise 
provided. 

ARTICLE  XIV 

FUNCTIONS  AND   DUTIES  OF  THE  NATIONAL  COMMISSION 

Section  1.  The  National  Commission  shall  be  a  congress  representing  the 
allied  interests  of  the  departmental  organizations  and  may  assume  such  dutiei 
and  exercise  such  authority  as  will  not  conflict  with  the  duties  and  authority  of 
the  Executive  Committee  or  the  purpose  of  the  Association. 

Section  2.  It  shall  elect  by  ballot  from  its  membership  at  the  time  of  each 
annual  meeting  of  the  Association,  and  for  a  term  of  one  year  each,  five  mem- 
bers of  the  Executive  Committee. 

The  creation  of  the  National  Commission  was  the  outgrowth 
of  an  attempt  at  reorganization  of  the  work  of  the  Associated 
Clubs  on  a  more  satisfactory  basis,  determined  upon  at  the 
Baltimore  convention  of  the  Associated  Clubs  in  June,  1913. 
The  Reorganization  Committee,  as  a  result  of  whose  report 
the  National  Commission  was  formed,  was  created  for  the 
purpose  of  giving  effect  to  the  declaration  of  principles  adopted 
at  Baltimore.  The  following  is  a  copy  of  the  report  of  the  Re- 
organization Conmiittee  rendered  at  the  Toronto  convention, 
June  21,  1914: 

This  committee  recommends,  then,  that  the  National  Association  shall  en- 
courage these  Departmental  to  become  affiliated  with  the  Association. 

We  urgently  recommend  that  these  departmental  organizations  be  left 
unhampered  in  the  conduct  of  their  own  respective  interests,  their  affiliation 
being  chiefly  for  the  purpose  of  strengthening  our  Association  and  of  providiu^ 


a  method  through  which  these  Departmentals  may  efficiently  care  for  their 
own  respective  special  interests. 

These  departmental  organizations  will  adequately  provide  for  the  respective 
individual  class  interests,  but  it  is  essential  also  that  the  Conference  of  Com- 
mittees introduced  at  Baltimore,  or  some  commission  of  like  character,  be  given 
permanent  form,  so  that  a  method  may  be  provided  for  the  consideration  and 
determination  of  those  problems  which  relate  to  two  or  more  of  these  class 
interests. 

We  reconunend,  therefore,  that  a  commission  be  formed  to  be  called  the 
National  Commission,  to  supersede  the  Baltimore  Conference  of  Committees 
and  to  be  composed  of  three  delegates  elected  annually  from  each  affiliated 
departmental  organization,  and  that  this  commission  be  authorized  to  assume 
such  duties  and  exercise  such  authority  as  will  not  conflict  with  the  duties  and 
authority  of  the  Executive  Committee. 

This  National  Commission  will  bring  together  into  one  body  the  strongest 
men  from  every  department  of  advertising;  to  consider  the  relations  between 
the  different  interests  of  advertising;  to  formulate  united  expressions  on  adver- 
tising problems  which  relate  to  the  various  special  interests  of  the  business; 
and  to  report  its  findings,  with  suggestions  for  action,  to  the  National  Asso- 
ciation and  to  the  Executive  Committee. 

It  is  the  hope  of  this  committee  that  this  National  Commission  will  thus  be 
of  great  permanent  value  to  our  organization  in  the  inception  of  ideas  and  plans 
which  wiU  have  for  their  purpose  the  betterment  of  class  advertising  conditions 
and  relations,  and  we  believe  that  it  should  have  proper  representation  on  the 
Executive  Committee. 

We  recommend,  therefore,  that  this  National  Commission  shall  have  authority 
to  elect  annually  from  its  own  membership  five  members  of  the  National  Exec 
utive  Committee,  so  that  the  Departmentals  may  be  thus  adequately  and 
directly  represented  in  the  councils  and  activities  of  the  Association. 

We  recommend,  also,  that  this  National  Commission  shall  have  authority 
over  eligibility  quaUfications  in  the  Departmentals,  because  this  Commission, 
composed  of  representatives  from  each  Departmental,  can  each  standardize  as 
far  as  practicable  these  membership  qualifications,  and  because  these  Depart- 
mentals will  have  a  greater  respect  for  each  other  and  co-operate  in  greater 
harmony  if  the  basis  of  membership  in  each  is  adjusted  satisfactorily  to  all. 

We  further  recommend  that  this  National  Conunission  shall  have  authority 
to  determine  what  interests  or  classes  of  advertising  may  be  organized  into 
Departmentals. 

It  is  our  suggestion  that  the  qualifications  for  membership  in  these  Depart- 
mentals be  set  high,  so  high,  in  fact,  that  no  one  may  become  a  member  of  any 
of  these  Departmentals  who  is  not  conducting  his  particular  business  or  adver- 
tising in  harmony  with  whatever  code  or  declaration  of  principles  and  ethics 
the  National  Commission  may  establish  as  a  test  of  membership  eligibility. 

This  plan  will  result  in  gathering  together  for  the  first  time  in  these  Depart- 
mentals for  concerted  action  those  men  who  are  actually  conducting  advertising 
on  the  moral  plane  to  which  it  is  the  purpose  of  our  Association  to  raise  all 
advertising  interests.  A  membership  in  the  Departmentals  under  the  plan 
suggested  by  our  conmiittee  will  at  once  become  something  of  a  distinction 
and  honor. 

The  declaration  of  principles  adopted  at  the  Baltimore  con- 
vention marks  an  epoch  in  the  attempts  on  the  part  of  A^ociated 


568 


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569 


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i 


Advertising  Clubs  to  raise  standards,  and  is  the  starting-point 
not  only  for  the  creation  of  the  National  Commission,  but  for 
the  development  of  the  Standards  of  Practice  which  were  the 
most  conspicuous  feature  of  the  Toronto  meeting. 

The  declaration  of  principles,  as  they  were  adopted  at  Balti- 
more, is  as  follows : 

! 

THE   DECLARATION  OP  PRINCIPLEa 

At  the  first  joint  Committee  meeting  in  the  history  of  the  Associated  Adver- 
tising Chibs  of  America,  of  i-epresentatives  from  each  of  the  departments  in 
advertising,  viz.:  Advertising  Agents,  Agricultural  Publications,  Directories, 
General  Advertisers,  Magazines,  Newspapers,  Outdoor  Advertising,  Printing 
and  Engraving,  Religious  Press,  Retail  Advertisers,  Teclmical  Publications, 
Trade  Press  and  Specialty  Advertising,  the  outstanding  feature  was  the  sincere 
and  determined  purpose  of  each  department  to  work  jointly  for  the  promotion 
of  efficient  advertising,  in  harmony  with  all  the  other  departments  and  interests 
concerned  in  promoting  the  common  good  of  advertising,  and,  where  abuses 
occur,  to  deal  fearlessly  for  their  correction,  realizing  that  only  by  this  united 
effort  no  loophole  will  be  left  through  which  the  unfair  practitioner  may  escape. 

To  this  end  the  Committee  beUeves  that  the  time  has  now  come  when  this 
great  body — ^the  Associated  Advertising  Clubs  of  America — should  estabUsh 
a  permanent  authenticated  Commission,  composed  of  the  constituent  elements 
represented  in  the  present  Committee,  and  such  other  elements  as  may  be 
added,  which  Commission  should  deal  in  detail  with  the  problem  existent  in 
our  fields. 

We  recommend  that  each  of  these  constituent  elements,  the  Advertising 
Agents,  Agricultural  Publications,  Directories,  General  Advertisers,  Magazines, 
Newspapers,  Outd(x>r  Advertising.  Printing  and  Engraving,  ReUgious  Press, 
Retail  Advertisers,  Technical  Publications,  Trade  Press,  Specialty  Advertismg, 
and  such  other  elements  as  may  be  added,  be  formed  as  sub-organizations  to 
the  Associated  Advertising  Clubs  of  America,  and  that  into  these  departmental 
organizations  be  admitted  as  members  only  those  who  can  meet  the  qualifica- 
tions established  by  the  duly  authorized  Commission  or  investigating  body. 

We  believe  in  truth,  the  corner-stone  of  all  honorable  and  successful  business, 
and  we  pledge  ourselves  each  to  one  and  one  to  all,  to  make  this  the  foundation 
of  our  dealings,  to  the  end  that  our  mutual  relations  may  become  still  more 
harmonious  and  efficient. 

We  believe  in  truth  not  only  in  the  prmted  word,  but  in  every  phase  of  business 
connected  with  the  creation,  publication,  and  dissemination  of  advertising. 

We  believe  there  should  be  no  double  standard  of  morality  involving  buyer 
and  seller  of  advertising  or  advertising  material.  Governmental  agencies 
insist  on  "fuU  weight"  packages,  and  "full  weight"  circulation  figures.  They 
should  also  insist  on  "full  weight"  deUvery  in  every  commercial  transaction 
involved  in  advertising.  We  beheve  that  agents  and  advertisers  should  not 
issue  copy  containing  manifestly  exaggerated  statements,  slurs,  or  offensive 
matter  of  any  kind,  and  that  no  such  statements  should  be  given  publicity. 

We  believe  that  the  present  chaotic  multiplicity  of  methods  of  arriving  at 
verification  of  circulation  statements  are  not  only  confusing  but  inadequate. 


and  that  the  time  for  radical  revision  of  these  methods  and  for  standardization 
of  statements  is  the  present,  and  the  opportunity  for  constructive  work  along 
these  lines  is  given  by  the  assemblage  at  this  Convention  for  the  first  time,  of 
representatives  of  all  the  different  interests  concerned  in  this  vital  matter. 

We  believe  in  co-operation  with  other  agencies  now  at  work  on  this  problem, 
especially  in  the  plan  of  the  Central  Bureau  of  Verification  which  has  already 
been  initiated  by  some  of  the  organizations  represented  in  this  Commission, 
and  request  the  Executive  Committee  to  proceed  therewith. 

We  indorse  the  work  of  the  National  Vigilance  Committee,  and  beheve  in 
the  continued  and  persistent  education  of  the  press  and  pubUc  regarding 
fraudulent  advertising,  and  recommend  that  the  Commission,  with  the  co-op- 
eration of  the  National  Vigilance  Committee,  should  pass  upjon  problems  raised 
and  conduct  campaigns  of  education  on  these  lines.  We  believe  it  to  be  the 
duty  of  every  advertising  interest  to  submit  problems  regarding  questionable 
advertising  to  this  Commission  and  to  the  National  Vigilance  Committee. 

We  believe  that  the  elimination  of  sharp  practice  on  the  part  of  both  buyer 
and  seller  of  advertising  and  advertising  material  will  result  from  the  closer 
relationship  that  is  being  established,  and  that  in  place  of  minor  antagonism** 
will  come  personal  co-oi>eration  to  the  increased  benefit  of  all  concerned,  and 
the  uplifting  of  the  great  and  growing  business  of  advertising. 

We  believe  in  upholding  the  hands  worthy  to  be  upheld,  and  we  beheve  that 
each  and  every  member  owes  a  duty  to  this  Association  of  enforcing  the  Code 
of  Morals  based  on  Truth  in  Advertising,  and  Truth  and  Integrity  in  all  the 
functions  pertaining  thereto. 
[Signed] 

Advertising  Agents:  W.  C.  D'Abct,  chairman;  Wm.  H.  Johns,  Stanley 
Clague. 

Agricultural  Publications:    T,  W.  Le  Quattb,  chairman;  Arthur  Capper. 

Directories:    W.  H.  Lee,  chairman;  G.  D.  W.  Marcy,  R.  H.  Donnelley. 

General  Advertisers:  Wm.  H.  Ingersoll,  chairman;  E.  St.  Elmo  Lewis, 
O.  C.  Harn. 

Magazines:  R.  G.  Cholmeley- Jones,  chairman;  A.  C.  G.  Hammesfahr, 
Joseph  A.  Ford. 

Newspapers:    A.  G.  Newmeyer,  chairman;  Jamx&  ICeeley,  Howard  Davts. 

Outdoor  Advertising:  O.  J.  Gude,  chairman;  Chas.  T.  Kindt,  E.  Allen 
Frost. 

Printing  and  Engraving:  H.  H.  Cooke,  chairman;  H.  A.  Gatchel,  ^L^- 
quis  Regan. 

ReUgious  Press:    W.  J.  McIndoe,  chairman;  Wm.  Shaw,  J.  F.  Jacobs. 

Retail  Advertisers:  M.  M.  Gillam,  chairman;  Wm.  C.  Freeman,  Walter 
S.  Hamburger. 

Technical  Pubhcations:  H.  M.  Swetland,  chairman;  Mason  Britton, 
John  Clyde  Oswald. 

Trade  Press:    Charles  G.  Phillips,  chairman;  W.  H,  Ukers,  Roy  F.  Soule. 

Specialty  Advertising:  Lewellyn  E.  Pratt,  chairman;  Theodore  R. 
Gerlach,  Henry  B.  ILirdenburo. 


For  purposes  of  reference  and  record,  the  Standards  of  Prac' 
tice  adopted  by  the  Toronto  convention  are  reprinted  in  full 
in  an  appendix  to  this  volume. 


570  ADVERTISING  STANDARDS 

(%)   DEVELOPMENT  OF  LEGISLATION  TO  REGULATE 

ADVERTISING 

The  following  is  a  summarized  list  of  State  laws  on  fraudu- 
lent advertising  as  they  stood  in  the  early  part  of  1914; 

*The  importance  to  advertising  men  of  familiarity  with  the 
various  State  law^s  regulating  advertising  needs  no  emphasis. 
The  foUowing  list  has  been  compiled  from  the  text  of  the  various 
statutes  as  furnished  by  the  Secretaries  of  State  of  the  several 
States.  It  is  not  presented  as  a  complete  digest  of  all  laws 
affecting  advertisements,  for  no  attempt  has  been  made  to  in- 
clude the  laws  against  specific  types  of  medical  copy  which 
describe  symptoms  of  disease  or  the  multitude  of  local  ordi- 
nances. The  former  have  little  or  no  interest  for  readers  of 
Printers*  Ink,  and  the  only  effect  of  reproducing  them  would  be  a 
slimy  trail  across  the  page,  and  to  collect  and  classify  the  differ- 
ent local  ordinances  would  tax  the  capacity  of  a  well-equipped 
legal  information  bureau.  There  are,  in  addition,  various  laws 
regulating  specific  forms  of  advertisements,  such  as  bankrupt 
stocks,  divorce  notices,  real  estate  sales,  prize  offers  for  the  solu- 
tion of  puzzles,  and  a  sizable  list  of  "blue-sky"  laws  regulating 
the  advertisement  of  securities.  These  are  referred  to  only 
when  they  form  part  of  statutes  regulating  fraudulent  advertis- 
ing in  general. 

Of  the  general  laws  forbidding  fraudulent  advertising  there 
are  three  classes:  The  Printers"  Ink  Model  Statute,  the  Model 
Statute  amended,  and  the  Massachusetts  form.  To  put  it 
briefly,  the  Printers*  Ink  Model  Statute  forbids  false  statements 
of  fact  by  the  man  who  has  the  goods  for  sale.  It  does  not  penalize 
statements  of  mere  opinion,  does  not  include  the  publisher  or  the 
agent  unless  the  advertisement  refers  to  commodities  or  serv- 
ices actually  offered  by  them,  and  does  not  make  it  necessary 
to  prove  intent  to  deceive.  In  some  States  the  Model  Statute 
has  been  amended  (and  emasculated)  by  the  addition  of  the 
word  "knowingly."  or  by  some  phrase  which  makes  it  necessary 
for  the  prosecution  to  prove  what  was  in  the  advertiser's  mind 
when  the  advertisement  was  written.  Thus  the  publication  of 
a  false  statement  is  no  crime  unless  it  be  shown  that  the  adver- 
tiser knew  it  was  false,  or  intended  to  deceive  somebody  with  it. 

*PnnUrt  Ink,  AprU  ^,  19U,  p.  26. 


ADVERTISING  STANDARDS 


571 


The  third  class  includes  laws  like  that  of  Massachusetts, 
which  contain  the  word  "knowingly,"  and  attempt  to  define 
the  kinds  of  false  statements  which  shall  be  penalized.  In- 
stead of  flatly  declaring  that  false  statements  of  any  sort  are 
forbidden,  these  laws  declare  that  false  statements  "concerning 
the  quantity,  the  quaUty,  the  origin,"  etc.,  of  merchandise  shall 
constitute  a  misdemeanor.  , 

The  complete  text  of  the  following  statutes  is  on  file  m  the 
offices  of  Printers*  Ink.  It  can  be  obtained  by  any  one  by  ad- 
dressing the  proper  Secretaries  of  State. 

Connecticut.— Chapter  65,  Acts  of  1913.    Penalizes  false 
statements  concerning  the  "nature,  quality,  method  of  produc- 
tion or  manufacture,  or  cost  of  any  goods."     Con- 
Summary  tains  the  word  "knowingly."    Penalty,  $10  to  $500. 
of  State       Indiana.— Section  347,  Acts  of  1913.    Same  text 

Lavjs  ^g  |.j^g  Massachusetts  law. 
FrauduLt  Iowa.— Chapter  309,  Laws  of  Thirty-fifth  General 
Advertising  Assembly  (1913).  The  Printers*  Ink  Model  Statute, 
amended  by  an  added  clause  which  reads,  "with  intent 
to  defraud  directly  or  indirectly.**  Special  exemption  is  provided 
for  publishers  and  agents  who  accept  or  place  advertising  in 
good  faith.     No  special  penalty  is  specified. 

Maryland.— Bill  now  pending  in  legislature— similar  to  the 

Massachusetts  law. 

Massachusetts.— Chapter  489,  Acts  of  1912,  amendmg 
Chapter  397,  Acts  of  1902.  Penalizes  false  statements  of  fact 
concerning  the  "quantity,  quality,  method  of  production  or 
manufacture,  cost  of  production,  cost  to  the  advertiser,  the  pres- 
ent or  former  price,  or  the  reason  for  the  price."  Also  penalizes 
false  statements  concerning  "the  manner  or  source  of  purchase, 
or  the  possession  of  prizes,  awards  or  distinctions."  Contains 
the  word  "knowingly."  The  employee  who  makes  the  false 
statement  is  specifically  included  in  addition  to  the  employer. 
The  penalty  is  $10  to  $500  for  each  offense. 

Minnesota.— Chapter  51,  Acts  of  1913.  The  Printers*  Ink 
Model  Statute.  Penalty,  that  fixed  by  statute  for  misde> 
meanor.  , 

Michigan.— Act  276,  Public  Acts  of  1913.  The  Printers^ 
Ink  Model  Statute  amended  by  adding  the  word  **  knowingly.*' 
Clause  specifically  exempts  publishers  who  receive  copy  from 
others  without  knowledge  of  its  falsity.  Penalty,  $25  to  $200, 
or  imprisonment  in  the  county  jail  for  90  days,  or  both. 


•■  \t 


57« 


AD\^RTISING  STANDARDS 


ADVERTISmG  STANDARDS 


57S 


)| 


V 

i 


Nebraska.— Senate  File,  188,  Acts  of  1913.  The  Printers* 
Ink  Model  Statute.     Penalty,  $25  to  $100. 

New  Jersey.— Assembly  Bill  734,  1913.  The  Printers* 
Ink  Model  Statute.     Penalty,  $1,000,  or  one  year  or  both. 

New  York.— Section  421  of  the  Penal  Code,  amended  by 
Chapter  590,  Acts  of  1913.  Same  as  Massachusetts  law,  with 
the  exception  of  the  clause  relating  to  separate  responsibility 
of  employees,  which  does  not  appear.  Clauses  are  added  regu- 
lating the  sale  of  real  estate  by  means  of  prizes  offered  for  the 
solution  of  puzzles,  etc.     Penalty,  as  provided  for  misdemeanor. 

North  Dakota.— Chapter  3,  Acts  of  1913.  The  Printers* 
Ink  Model  Statute.  A  section  is  added  specifying  that  it  shall 
be  the  duty  of  the  State's  attorneys,  sheriffs,  police  officers, 
health  officers,  and  food  commissioners  to  enforce  the  statute. 
A  second  added  section  extends  the  statute  to  cover  any  person 
"who  aids  another  to  violate  the  same.'*  Penalty:  first  offense, 
$10  to  $100;  subsequent  offenses,  $100  or  60  days  in  jail,  or 
both. 

Ohio.— House  Bill  104  (1913  Session).  The  Printers*  Ink 
Model  Statute.  Penalty,  $10  to  $100,  or  imprisonment  in  the 
county  jail  20  days,  or  both. 

Oregon.— Section  2230,  Lord's  Oregon  Law.  Penalizes 
false  statements  concerning  the  "quantity,  quality,  value, 
price,  method  of  producing  or  manufacture  of  merchandise  or 
professional  work,  the  manner  or  source  of  purchase  of  mer- 
chandise, or  the  motive  or  purpose  of  any  sale."  Contains  the 
word  "knowingly."  Penalty,  $10  to  $50,  or  imprisonment  20 
days,  or  both. 

Pennsylvania.— Act  No.  8,  1913  General  Assembly.  Pen- 
alizes false  statements  concerning  the  "quantity,  quality,  value, 
merit,  use,  present  or  former  price,  cost,  reason  for  the  price, 
motive  or  purpose  of  a  sale,  method  of  cost  or  production, 
possession  of  rewards,  prizes,  or  distinctions,  or  the  manner  or 
source  of  purchase."  Contains  the  word  "knowingly."  Pen- 
alty, a  fine  not  to  exceed  $1,000,  or  imprisonment  not  to  exceed 
60  days,  or  both. 

Rhode  Island.— Bill  now  pending  in  legislature.  The 
Printers*  Ink  Model  Statute.  Amended  by  adding  the  word 
*^  knowingly.'* 

South  Dakota.— Chapter  15,  Acts  of  1913.     Same  text  as 
Massachusetts  law.     Penalty,  $10  to  $100  for  each  offense. 
Utah.— Chapter  22,  Acts  of  1913.    Any  person  who,  on  his 


own  behalf  or  as  agent,  employee,  or  representative,  "shall 
knowingly  produce,  publish,  print,  use,  circulate,  display,  or 
transport  any  false,  fraudulent,  or  misleading  advertisement," 
or  shall  cause  any  of  those  things  to  be  done,  is  declared  to  be 
guilty  of  a  misdemeanor.  Section  2  defines  an  advertisement  as 
"any  notice  or  announcement  made  by  a  handbill,  placard, 
sign,  newspaper,  magazine,  or  other  public  print,  or  by  an  oral 
proclamation."  Section  3  declares  "objectionable  and  perni- 
cious within  the  meaning  of  this  Act :  Advertisements  of  sales  of 
'damaged  goods,'  of  *fire  sales,'  of  *  bankrupt  sales,'  of  *  wreck 
sales'  and  the  like,  where  merchandise  not  a  part  of  such  stock 
represented  in  the  advertisement  is  sold,  and  all  other  advertise- 
ments wilfully  designed  or  calculated  to  deceive  or  mislead  the  per- 
sons  to  whom  they  are  directed."    No  specific  penalty  provided. 

Washington. — Chapter  34,  Acts  of  1913.  The  Printers* 
Ink  Model  Statute.  An  added  clause  specifically  exempts 
owners,  publishers,  agents,  and  employees  of  newspapers  who 
accept  advertising  in  good  faith.  Penalty,  as  provided  for  "mis- 
demeanor." 

Wisconsin. — Chapter  510,  Laws  of  1913.  The  Printers* 
Ink  Model  Statute  amended  by  the  addition  of  a  clause  reading^ 
**for  the  purpose  of  defrauding  the  public."  This  is  equivalent 
to  the  insertion  of  the  word  "knowingly."  A  clause  exempts 
publishers  who  accept  copy  in  good  faith.  Penalty,  $10  to  $200, 
or  imprisonment  not  more  than  90  days,  or  both. 

Following  is  the  complete  text  of  the  Printers*  Ink  "Model 
Statute"  which  Ls  law  in  six  States,  as  indicated  above. 

Any  person,  firm,  corporation,  or  association  who,  with  intent  to  sell  or  in 
any  wise  dispose  of  merchandise,  secm-ities,  service,  or  anything  offered  by  such 
person,  firm,  corporation,  or  association,  directly  or  indirectly,  to  the  public 
for  sale  or  distribution,  or  with  intent  to  increase  the  consumption  thereof,  or 
to  induce  the  public  in  any  manner  to  enter  into  any  obligations  relating  thereto, 
or  to  acquire  title  thereto,  or  an  interest  therein,  makes,  publishes,  disseminates, 
circulates,  or  places  before  the  public,  or  causes,  directly  or  indirectly,  to  be 
made,  published,  disseminated,  circulated,  or  placed  before  the  public,  in  this 
State,  in  a  newspaper  or  other  publication,  or  in  the  form  of  a  book,  notice, 
hand-bill,  poster,  bill,  circular,  pamphlet,  or  letter,  or  in  any  other  way,  an 
advertisement  of  any  sort  regarding  merchandise,  securities,  service,  or  any- 
thing so  offered  to  the  public,  which  advertisement  contains  any  assertion, 
representation,  or  statement  of  fact  which  is  untrue,  deceptive,  or  misleading, 
thall  be  guilty  of  a  misdemeanor. 

In  the  early  part  of  1915  the  editors  of  Printers''  Ink  issued 
the  following  summary  of  the  progress  of  the  campaign  against 


i'       9: 


574 


ADVERTISING  STANDARDS 


ADVERTISING  STANDARDS 


575 


Wim 


:t      !.• 


I 


fraudulent  advertising  from  the  legal  side,  as  it  stood  at  that 
time.  This  summary  brings  up  one  year  farther  the  record  of 
advance  made  in  the  foregomg  article: 

^he  constantly  increasing  number  of  letters  received  by  Print- 
ers Inky  bearmg  on  some  phase  of  the  campaign  against  fraudu- 
lent ad  vertismg,  testify  to  the  great  interest  in  the  movement 
in  all  parts  of  the  country.  Most  of  the  letters  are  requests  for 
"^lor^ation  on  some  point  which  affects  pending  legislation, 
aiid  the  same  questions  are  coming  up  again  and  again,  wherever 
the  Pnniers'  Ink  Model  Statute  is  introduced.  It  is  timely, 
therefore,  to  put  our  answers  to  those  questions  on  record :  to 
outline  once  more  the  arguments  in  favor  of  the  legal  remedy 
for  dishonest  advertising,  and  to  reply  to  those  who  oppose,  for 
one  reason  or  another,  the  campaign  to  place  all  advertising 
on  a  foundation  of  the  truth. 

In  November,  1911,  Printers*  Ink  made  two  specific  recom- 
mendations.   First,  that  adequate  legislation  be  secured  in  all 
States,  based  on  a  Model  Statute  drafted  after  an  exhaustive 
investigation  of  all  the  lav/s  against  fraudulent  representation 
then  existing.    Second,  that  the  clubs  affliliated  with  the  Associ- 
ated Advertising  Clubs  should  organize  Vigilance  Committees 
empowered  to  investigate  cases  of  questionable  advertising, 
and  to  co-operate  with  the  local  prosecuting  officers  in  securing 
convictions  under  the  law  when  such  action  should  be  necessary. 
What  resulted  may  be  briefly  summarized  as  follows:  The 
Printers'  Ink  Model  Statute  has  been  enacted  in  eight  States;  it 
has  been  passed  in  an  amended  form  in  three  States;  and  six 
States  had  passed  laws  based  on  a  less  effective  statute.    Three 
States  already  had  laws  of  this  latter  form  in  1911.    Vigilance 
p)mmittees  have  been  organized  in  practically  every  ad  club 
located  m  a  State  where  the  law  prohibits  dishonest  advertising, 
and  m  many  clubs  located  in  other  States.    The  Associated 
Advertising  Clubs  have  a  National  Vigilance  Committee,  with 
headquarters   at   920  Hume-Mansur  Building,   Indianapolis. 
Numerous  Boards  of  Trade  and  other  commercial  bodies,  not 
duikJtly  affiliated  with  the  Associated  Advertising  Clubs,  have 
also  organized  Vigilance  Committees  along  similar  lines.    At 
the  present  writing  the  Printers'  Ink  Statute  is  pending  in  the 

^PritUen  Jul,  MaixL,  i,  1015.  p.  66. 


legislatures  of  seven  States,  and  plans  are  being  made  for  its  in- 
troduction in  at  least  three  others. 

Before  taking  up  in  detail  the  arguments  for  and  against  the 

specific  remedy  proposed,  it  is  well  to  review  the  reasons  for 

applying   any   remedy   at   all.     Honest   advertisers 

W^%  a  demand  a  law  against  dishonest  advertising  because 
U^eLd  i^  ^s  continually  depreciating  the  value  of  all  adver- 
tising. Every  lying  advertisement  that  is  published 
makes  it  a  little  bit  harder  for  the  honest  advertiser  to  get  the 
public  to  believe  what  he  says.  As  the  burnt  child  dreads  fire, 
the  man  or  woman  who  has  been  victimized  through  a  fraudu- 
lent advertisement  thenceforward  regards  all  advertising  with 
suspicion.  The  honest  merchant,  whose  goods  have  the  quality 
he  claims  for  them,  finds  the  public  the  more  reluctant  to  believe 
him  if  his  next-door  neighbor  is  conducting  a  campaign  of  mis- 
representation. Many  concerns  will  not  advertise  at  all  or  re- 
fuse to  advertise  in  certain  mediums,  because  it  is  such  hard 
work  to  get  people  to  believe  what  they  say.  The  lying  adver- 
tiser is  obstructing  a  part  of  the  profits  which  rightfully  belong  to 
his  honest  contemporary,  just  as  surely  as  if  he  robbed  the  lat- 
ter's  safe.  It  is  quite  true  that  the  dishonest  advertiser  doesn't 
get  those  obstructed  profits.  Nobody  gets  them.  They  are 
lost. 

If  it  were  not  for  the  fact  that  fraudulent  advertising  thus 
reacts  upon  the  honest  advertiser,  the  former  could  be  left  to 
work  out  its  own  destruction.  The  dishonest  advertiser  ulti- 
mately winds  up  in  the  bankruptcy  court,  if  indeed  he  escapes 
a  criminal  prosecution.  But  in  the  meantime  he  is  injuring 
every  decent  advertiser,  to  say  nothing  about  the  harm  he  is 
doing  to  those  who  put  their  trust  in  his  lying  claims.  The  an- 
nual report  of  the  Postmaster  General  for  the  fiscal  year  ending 
June  30,  1914,  states  that  364,000  cases  of  fraud  had  been  dis- 
posed of  during  the  year,  and  that  the  promoters  of  those  fraud- 
ulent schemes  received  approximately  $68,000,000.  The  only 
thing  that  will  stop  that  sort  of  injury  is  the  strong  arm  of  the 
law.  Preaching  will  not  stop  it,  and  philosophizing  will  not 
heal  the  hurt.  We  might  as  well  go  up  and  down  the  land  an- 
nouncing burglary,  and  moralizing  upon  the  certain  ultimate 
fate  of  those  who  break  into  other  people's  houses.  We  could 
get  99  per  cent,  of  the  public  to  agree  with  us  perfectly,  but  in 
the  meantime  the  other  1  per  cent,  would  be  breaking  into  our 
houses  and  walking  off  with  the  soUd  silver — that  is,  unless  there 


576 


ADVERTISING  STANDARDS 


ADVERTISING  STANDARDS 


577 


is  a  law  making  burglary  a  crime,  and  a  police  force  thai  will  en- 
force the  law. 

Those  are  the  tundamental  premises  which  underlie  the  rec- 
ommendations originally  made  by  Printers*  Ink. 

The  Model  Statute,  when  reduced  to  its  simple  terms,  pro- 
vides that,  "The  person  who  is  responsible  for  the  publication 
of  an  advertisement  for  goods  which  he  himself  offers  for  sale 
shall  be  guilty  of  a  misdemeanor  if  that  advertisement  contains 
any  statement  as  to  fact  which  is  untrue,  deceptive,  or  mislead- 


ing. 


It  is  highly  important  to  understand  the  various  provisions 
of  the  law,  and  the  reasons  for  their  inclusion  in  the  exact  form 
in  which  they  are  stated. 

1.  In  the  first  place,  it  must  be  appreciated  that  the  adver- 
tiser himself  is  the  one  individual  who  can  properly  be  held 
responsible  for  the  truth  or  falsity  of  any  statement  contained 
in  an  advertisement.  If  any  one  can  be  presumed  to  know 
whether  a  statement  is  true  or  not,  the  advertiser  is  that  man. 
The  advertisement  is  published  in  his  interest,  and  for  his 
benefit.  Whatever  profit  arises  from  its  publication  is  his 
profit.  Therefore  the  Model  Statute  was  so  drawn  as  to  place 
the  responsibility  for  dishonest  statements  directly  upon  the 
advertiser — upon  the  man  who  vtters  the  advertisement,  and 
whose  money  pays  for  its  circulation.  The  penalty  is  imposed 
upon  the  individual — whether  natural  or  corporate — who  lies 
about  the  thing  which  he  himself  offers  for  sale.  This  qualifica- 
tion is  to  be  found  in  the  words  "or  anything  offered  by  such 
person,  firm,  corporation,  or  association.** 

Thus  it  is  evident  that  the  publisher  who  accepts  an  adver- 
tisement, whether  or  not  he  regards  it  as  above  suspicion,  is 
not   subject   to   the   penalty   imposed  by   the   law. 

The  Pub-  Unless  he  publishes  false  statements  of  fact  regarding 

hUsher's    something  which  he  himself  is  offering  for  sale,  such 
ailroSy^'ls  ^  ^^  untrue  statement  of  his  circulation,  for  ex- 

Limtted  ample,  he  cannot  be  held  liable.  That  provision  is 
only  just,  because  publishers  should  not  be  placed 
under  the  responsibility  of  advertising  the  truth  of  every  state- 
ment which  is  contained  in  copy  which  is  submitted  to  them. 
It  is  not  fair  to  subject  a  publisher  to  the  risk  of  a  prosecution 
for  misdemeanor  if  he  fails  to  verify  every  advertisement  he 
prints,  when,  as  a  matter  of  fact,  he  frequently  has  neither  the 


time  nor  themeansof  verifying  them.  If  heaccepts  copy  which 
he  knows  is  fraudulent  he  is  guilty  of  moral  delmquency  no  doubt, 
but  it  is  a  form  of  delinquency  which  the  law  cannot  recognize 
without  working  injustice  to  many  innocent  publishers. 

The  same  rLoning  applies  to  the  advertising  agent  the 
advertising  manager,  and  other  agents  and  employees  of  the 
advertiser  Their  status  as  agents  or  employees  places  upon 
theTr  principal  (the  advertiser)  the  responsibihty  for  their  acts 
performed  in  his  service.  It  is  his  duty  to  give  them  accurate 
formation  in  the  first  pla^e,  and  to  -^-^-^^/^.^^^^^ 

wi4  the  advertiser,  and  the  responsibihty  for  what  is  printed 

"^T^The  kw  contemplates  the  regulation  of  statements  of  fact, 
and  says  nothing  about  statements  of  opinwn.    That  quahfaca- 
Uon  is  also  imporUnt,  for  the  reason  that  the  issues  upon  which 
an  advertiser  is  brought  to  trial  must  be  susceptible  of  prc^f ^ 
Furthermore,  the  courts  have  recognized  for  many  years  the  nght 
of  a  merchant  to  indulge  in  what  is  known  as     puffing  -the 
extollmg  of  the  goods  which  he  has  for  sale  as  the    best  in  the 
woX^*  "absolutely  miequalled,**  and  soon..  Such  superlative 
praise  is  merely  an  expression  of  more  or  less  mgenuous  opinion 
and  deceives  nobody.     Whether  it  is  good  advertising  practice  or 
not  fs  oj^n  to  question,  but  it  is  seldom  taken  seriously   even 
by  the  advertiser  himself,  and  should  not  be  declared  illegal 

But  a  statement  offaet  is  either  true  or  false     The  patent- 
medicine  manuf  axiturer  who  advertises  that  his  product   contams 
S^hXlforming  drug**  can  prove  that  the  statement  is  true 
or  the  Vigilance  Committee  can  prove  that  it  is  false,     ine 
declaration  by  a  stock-promoter  that  the  ^^o^^P^^^  ^^.  ^^^^^^ 
"owns**  certain  properties  can  be  verified.     There  is  no  room 
for  differences  of  opinion  in  the  presence  of  the  faxjts. 

3.  The  statements  of  fact  which  are  penalized  are  those 
which  are  (a)  untrue,  (b)  deceptive     c)  pleading     Concern- 
ing untrue  statements,  little  need  be  said      A  sim- 
Why  -Mis-  pie,  straight-out-and-out  he  will  find  few  defenders 
leading"    Nobody  is  compelled  to  advertise  his  goods;  if  the 
Siaiements       .,    ^^j  ^^^^  ^j,^^  ^im  he  can  always  keep  silent. 
S^ed  But  there  are,  unfortunately, .  fraudulent  advertise- 
"^      ments  which  do  not  contain  a  single  statement  of  fact 
which  is  wholly  untnie.    They  do  conUm  deceptive  statemenU. 


STB 


ADVERTISING  STANDARDS 


!:■ 


^rJ^^^^^^^  s^^ements.  but  none  which  can  be  proved 

Take  for  example,  the  "gyp"  operators  which  are  sometimes 
met  with  m  the  piano  and  furniture  trade.  The  "gyp"  rents 
a  variant  house  m  a  good  neighborhood,  furnishes  it  more  or 
less  completely,  and  inserts  want  ads  in  the  daily  papers  which 
state  that  "A  gentleman  who  is  obUged  to  leave  town  wUl 
sacrifice  his  fine  piano  and  furniture,  etc."  Of  course,  the 
whole  scheme  IS  fraudulent.  The  furniture  and  the  piano  are 
next  to  worthless,  and  if  he  is  not  interfered  with  the  operator 
wUl  restock  the  house  again  and  again.  But  when  any  one 
tries  to  prove  that  a  statement  of  fact  in  the  adveHisifig  is  urUrue. 
he  has  his  work  cut  out  for  him.  The  statements  are,  however 
deceptive  and  misleading.  ' 

Again,  there  are  a  number  of  trade  terms  which  are  under- 
stood m  theu-  proper  meaning  by  certain  individuals,  but  which 
pve  an  entu^ly  erroneous  impression  when  used  in  advertising 
Alr.^  ^T?^  public     For  example,   a  certain  New  York 
department  store,  which  has  smce  discontinued  business,  adver- 
tised a  sale  of  "Arctic  Seal  Coats"  at  a  price  which  was  declared 
to  represent  a  great  reduction.     Upon  prosecution  under  the 
IVew  York  law,  the  store  called  several  witnesses  to  prove  that 
Arctic  Seal     w^as  a  term  well  understood  in  the  fur  trade  as 
refernng  to  dyed  rabbit  fur.    The  fur  wa^  "Arctic  Seal,"  and 
the  store  claimed  the  right  to  call  it  by  its  name.     The  fact 
that  the  purchaser  was  misled,  and  believed  that  she  was  buying 
some  grade  of  seaJskin  was,  of  course,  unfortunate,  but  the 
store  could  not  be  held  responsible  for  her  misunderstanding  of 
a  plam  trade  term.    The  presence  of  the  word  misleading  in 

lSl!^,^Ti,  *''''  ^""^  ""^^""f^  fraudulent  advertising,  however, 
secured  the  conviction  of  the  store,  which  was  later  aflirmed  by 
the  Appellate  Division  of  the  Supreme  Court 

Thus  It  IS  important  to  include  in  the  scope  of  the  law  those 
statements  which  are  deceptive  and  misleading.  The  statute 
which  omits  either  of  those  words  is  not  an  adequate  law, 
tor  It  cannot  reach  the  advertiser  who  makes  statements 
with  a  double  meaning,  and  it  frequently  will  be  found  inadequate 
to  check  the  dishonest  use  of  trade  terms  and  other  words 
which  mean  entu-ely  different  things  to  different  groups  of 

So  much  for  the  direct  provisions  of  the  law  itself,  and  the 
arguments  m  favor  of  ite  adoption  in  its  suggested  form.    Un- 


ADVERTISING  STANDARDS 


579 


fortunately  it  will  not  stop  all  forms  of  dishonesty  m  adver- 
tising, but  no  law  can  be  drawn,  in  our  opinion,  which  will 
do  that  without  at  the  same  time  working  injustice  to  a  great 
many  honest  men.  Dishonest  statements  of  opinion  cannot 
be  prevented  by  law  until  some  method  is  discovered  whereby 
men  may  be  made  honest  by  legislative  enactment. 

Let  us  turn  now  to  the  arguments  which  are  made  by  the 
opponents  of  the  law.  Those  arguments  ordinarily  fall  into 
two  classes:  those  which  inaintain  that  a  law  is  not  the  proper 
remedy,  and  those  that  are  aimed  at  the  particular  form  of  law 

suggested. 

1.  From  the  very  start  of  the  movement  there  have  been  a 
few  who  declared  that  the  best  method  of  combating  fraudulent 
advertising  was  through  the  process  of  educating  publishers  to 
refuse  questionable  copy.  It  is  a  fact  that  publishers  are 
examining  their  advertising  columns  more  carefully  than  ever 
before,  and  that  the  obviously  dishonest  advertiser  is  finding 
the  list  of  mediums  which  are  open  to  him  growing  smaller  every 
year.  The  importance  of  that  development  should  by  no 
means  be  depreciated,  but  for  two  very  good  reasons  it  cannot 
be  regarded  as  a  suflScient  remedy.  In  the  first  place,  every 
piece  of  dishonest  copy  is  not  obviously  fraudulent,  and  the 
publisher  has  neither  the  time  nor  the  opportunity  to  investi- 
gate every  claim  which  is  made.  Furthermore,  a  given  piece 
of  copy  may  be  entirely  unobjectionable,  and  the  follow-up 
may  be  fraudulent  in  the  extreme.  Even  the  most  conscientious 
publishers  are  sometimes  imposed  upon  in  this  way. 

And,  in  the  second  place,  even  if  every  publication  in  existence 
should  raise  the  bar  against  fraudulent  advertising  (which  is  a 
consummation  not  likely  to  come  to  pass  in  this  generation, 
the  United  States  mails  are  still  open  to  the  faker.  He  can  buy 
plenty  of  names  from  "sucker  lists"  at  one  to  ten  cents  apiece 
and  can  circularize  them  to  his  heart's  content.  Of  course,  he 
runs  the  risk  of  being  stopped  by  a  fraud  order  if  his  activity 
grows  too  conspicuous,  but  he  can  operate  for  a  long  time  and 
swindle  thousands  of  people  without  attracting  the  attention 
of  the  Post  Oflace  if  he  is  reasonably  careful. 

Every  person  who  has  ever  answered  a  patent-medicine 
advertisement,  or  applied  for  a  stock-selling  prospectus,  or 
responded  to  an  "agents  wanted"  appeal,  or  written  name  and 
address  on  a  postal  card  requesting  "further  information" 
about  any  one  of  a  thousand  different  schemes,  becomes  sooner 


580 


ADVERTISING  STANDARDS 


or  later  an  asset  of  some  name  broker.     The  original  recipient 
of  the  inquiry  exhausts  his  wiles  in  the  endeavor  to  get  the 
prospects  money,   and  then  sells  the  prospect's   name  and 
address  to  a  concern  which  deals  in  "sucker  hsts,"  properly 
classified.     Hundreds  of  thousands  of  names  can  be  bought 
from  these  concerns,  of  people  who  are  known  to  be  responsive 
to  all  sorts  of  fraudulent  appeals.     Some  of  the  most  notorious 
swindlers  do  not  advertise  in  pubhcations  at  all,  but  depend 
Jargely    upon    purchased    names.     A    certain    Chicago    stock- 
broker who  is  now  under  indictment  for  using  the  mails  to 
defraud  used  publication  advertising  only  as  a  means  of  getting 
subscribers  for  a  financial  magazine  which  he  published.     Prom- 
ises made  in  his  publication  advertising  were  kept,  though  the 
same  could  hardly  be  said  with  regard  to  the  follow-up  letters 
with  which  prospects  were  deluged.     If  every  publisher  would 
purge  his  columns  of  the  frauds  and  the  near-frauds  it  would 
be  an  undisguised  blessing,  but  it  would  not  put  an  end  to 
fraudulent  advertising. 

2.  It  has  been  sometimes  urged  that  a  law  against  dishonest 
advertising  would  crowd  the  court  calendars  with  a  lot  of  petty 

The  Real  ^^^\  ^^^^  ^^*^"^^  furnish  a  means  for  unscrupulous 
Penaluj  Is  ?ierchants  to  harass  their  competitors.     Experience 

Publicity  has.  shown,  however,  that  no  such  results  need  be 
anticipated.  In  any  of  the  States  where  the  law  has 
been  passed  convictions  have  been  few  because  it  is  seldom 
necessary  to  invoke  the  law.  The  law  was  suggested  in  the 
tirst  place,  not  as  a  means  of  obtaining  convictions,  but  as  a 
tulcrum  for  the  lever  of  moral  suasion.  The  chief  duty  of  a 
vigilance  committee  is  not  to  prosecute  offenders,  but  to  induce 
ottenders  to  reform.  Two  or  three  convictions  in  any  given 
locality  are  all  that  is  necessary,  as  a  rule,  to  set  up  a  very 
general  sentiment  that  lying  is  dangerous.  The  real  penalty 
imposed  IS  not  the  nominal  fine  or  short  imprisonment  specified 
in  the  statute  but  the  fear  of  publicity.  No  advertiser  cares 
to  face  a  public  demonstration  of  the  fact  that  his  announce- 
ments cannot  be  believed. 

3.  By  far  the  most  general  argument  against  the  statute, 
and  the  argument  which  is  most  plausible,  is  the  declaration 
i  hat  the  provisions  of  the  law  are  unjust  because  they  do  not 
Kulude  only  those  misstatements  which  are  made  "knowinglv  " 
*  r  with  intent  to  defraud."  It  is  contended  that  the  law  is 
too  wide  a  departure  from  the  usual  type  of  criminal  statutes, 


ADVERTISING  STANDARDS 


581 


in  that  it  does  not  regard  either  fraudulent  intent  or  actual 
injury  to  any  one  as  elements  of  the  crime  which  it  creates. 
Public  policy  does  not  require,  these  objectors  claim,  that 
business  men  should  be  subjected  to  criminal  prosecution  for 
acts  which  the  most  careful  and  honest  man  might  sometimes 
commit  without  harm  to  any  one.  No  advertiser  should  be 
penalized  for  his  "innocent  mistakes."  Unless  it  can  be  shown 
that  the  advertiser  intended  to  swindle  somebody,  or  that 
somebody  was  actually  swindled,  his  acts  cannot  be  regarded 
as  criminal. 

The  protagonists  of  this  view  generally  declare  that  they 

would  be  quite  satisfied  with  the  law  if  amended  so  as  to  penalize 

advertisers  who  "knowingly"  make  false  statements. 

What  Does  Frequently  they  introduce  a  substitute  bill,  contain- 

Adv^ii6er  ^"S  the  word  "knowingly"  or  some  equivalent  phrase, 

*'Knaw?''  and  specifically  mentioning  the  kind  of  misstatements 

which  are  to  be  penalized.     These  bills  declare  that 

false  statements  regarding  "  the  quantity,  the  quality,  the  price, 

the  value,"  etc.,  shall  constitute  the  misdemeanor.     The  animus 

of  the  opposition  to  any  measure  can  generally  be  judged  by  the 

character  of  those  who  are  back  of  it.     Legislators  and  others 

interested  in  the  repression  of  dishonest  advertising  will  do 

well  to  scrutinize  pretty  carefully  the  credentials  of  those  who 

come  in  support  of  these  amendments  and  substitutes.     Their 

motives  are  usually  quite  painfully  evident. 

Putting  that  aside,  however,  and  with  regard  to  the  validity 
of  the  arguments — it  is  claimed  that  the  intent  is  the  crime. 
That  is  true,  but  the  intent  is  a  state  of  mind.  The  addition 
of  the  word  "knowingly"  to  the  text  simply  imposes  upon  the 
prosecution  the  burden  of  proving  what  was  in  the  advertiser's 
mind  when  the  advertisement  was  written.  If  he  lies  carelessly, 
or  ignorantly — no  matter  how  black  the  lie,  or  how  bitterly  it 
betrays  the  confidence  of  those  who  trust  it — he  is  not  responsi- 
ble. Only  when  it  can  be  proved  that  he  knew  he  was  lying 
can  he  be  brought  to  book.  Every  person  concerned  in  the 
case,  from  the  judge  down,  may  be  willing  to  stake  his  liberty 
upon  the  fact  that  the  advertiser  is  a  conscienceless  scoundrel — 
but  when  it  comes  to  legally  admissible  proof  that  he  "knew" 
the  falsity  of  any  given  statement  it  is  quite  a  different  story. 

Judge  Aldrich,  of  Boston,  in  WTiting  an  opinion  for  the  Cir- 
cuit Court  of  Appeals  in  the  case  of  Estes  &  Son  v.  Ford  (100 
C.  C.  A.  258),  recently  said:  "The  whole  trend  of  modern 


582 


ADVERTISING  STANDARDS 


ADVERTISING  STANDARDS 


583 


decision  is  in  the  direction  of  making  it  clear,  whether  in  re- 
spect to  food,  drugs,  or  wearing  apparel,  that  the  placing  of 
adulterations  or  imitations  upon  the  market,  with  the  purpose 
of  deceiving  the  members  of  the  public,  who  buy,  as  they  do 
oftentimes,  upon  casual  inspection,  into  buying  something  for 
what  it  is  not,  is  a  business  which  is  not  countenanced  by  law. 
That  is  the  principle  which  has  called  into  being  such  statutes 
as  the  Pure  Food  Law,  and  under  it  the  doctrine  of  unfair 
competition  has  grown  up.  The  food  inspector  who  finds  a 
bottle  of  catsup  doped  with  illegal  preservatives  does  not  stop 
to  inquire  as  to  whether  the  manufacturer  "knew"  the  dope 
was  there.  The  inspector  knows  he  knew,  and  so  does  the 
court.  When  a  manufacturer,  with  all  the  rest  of  the  world  to 
choose  from,  picks  out  a  trademark  almost  identical  with  that 
of  a  successful  competitor,  the  court  does  not  stop  to  inquire 
as  to  whether  he  "knew"  of  the  similarity,  or  if  he  "intended" 
to  deceive  anybody.  It  is  only  reasonable  to  suppose  that  he 
didn't  stumble  upon  it  accidentally,  and  if  it  should  so  happen 
that  life  did,  the  public  is  entitled  to  protection  from  such 
egregidus  carelessness. 

The  case  of  the  advertiser  is  not  wholly  dissimilar.    When, 

with  the  whole  vast  range  of  truthful  statements  to  choose 

from,  he  permits  a  lie  to  issue  over  his  name,  why 

Shmdd    should  it  be  necessary  to  prove,  legally  and  formally, 

iherZih  ^at  he  "knew"  it  was  a  lie?    Even  though  he  did 

About  (hen  ^^^  ^^^  deliberately  and  with  malice,  is  not  the  public 

BuHnes*  entitled  to  protection  from  the  consequences  of  his 

carelessness?    Indeed,  if  he  is  so  neglectful  of  his  own 

business  as  not  to  "know"  the  truth  about  it,  he  is  a  fit  subject 

for  a  lunacy  commission,  and  his  creditors  would  be  justified  in 

applying  for  a  receivership  without  delay. 

Such,  in  outline,  are  the  chief  arguments  in  opposition  to 
the  proposed  remedy.  As  a  general  rule  they  will  be  dis- 
credited in  advance  merely  by  an  investigation  of  the  source 
from  which  they  spring.  If  the  dishonest  advertiser  injured 
no  one  by  it,  he  might  be  permitted  to  lie  in  undisturbed  tran- 
quillity. But  his  fraudulent  pretences  not  only  do  injury  to 
his  innocent  victims,  but  to  every  honest  advertiser  as  well. 
The  courts  will  protect  the  good  will  of  a  manufacturer  or  a 
merchant  from  injury  through  the  imitation  of  his  trademarks, 
labels,  etc.,  thus  demonstrating  the  fact  that  good  will  is  a 
form  of  property.    Why  should  not  that  property  be  protected 


from  the  injuries  inflicted  by  the  fraudulent  advertiser?  Print- 
ers' Ink  believes  that  it  should  be  protected,  and  that  the  best 
way  to  do  it  is  by  the  Vigilance  Committee,  supported  by  the 
Model  Statute. 

The  legislature  of  the  State  of  California,  in  June,  1915, 
passed  a  Fraudulent  Advertising  Law  which  was  in  effect  the 
Printers*  Ink  Model  Statute,  amended  by  the  insertion  of  a 
clause  which  reads:  "Which  is  known,  or  which  by  the  exercise 
of  reasonable  care  should  be  known,  to  be  false  or  untrue, 
deceptive  or  misleading,  by  the  person  making,  publishing, 
disseminating,  or  circulating  or  placing  before  the  public  said 
advertisment."  There  is  an  additional  clause  exempting  pub- 
lishers who  in  good  faith  accept  advertisements  without  knowl- 
edge of  their  misleading  character. 

CONCLUSION 

Honesty  may  be  enforced  by  law.  Honor  usually  is  in 
advance  of  legal  requirements  and  helps  to  shape  them. 

The  phrase  "truth  in  advertising"  has  assumed  a  much 
wider  meaning  than  mere  enforcement  of  legal  honesty.  Under 
this  motto,  honesty  is  being  enforced,  and  it  is  to  be  enforced 
by  the  associated  clubs. 

But  the  Standards  of  Practice  which  have  been  based  upon 
this  phrase  are  a  codification  of  advertising  honor.  They  are 
proving  to  be  much  more  vital  than  mere  resolutions.  In  them, 
if  they  are  lived  up  to,  hes  the  answer  to  most  of  the  attacks 
which  have  been  made  upon  this  new  aid  to  merchandised  dis- 
tribution. 

No  one  who  is  familiar  with  the  real  substance  of  present-day 
advertising  can  fail  to  be  impressed  with  the  power  for  good  or 
for  evil  which  inheres  in  attempts  artificially  to  stimulate  de- 
mand. Those  who  are  profiting  honestly  by  advertising  do 
not  like  to  consider  its  power  for  ill,  but  it  is  this  feature  which 
is  most  conspicuous  to  the  general  public.  The  fact  that  the 
public  sees  most  vividly  this  side  of  advertising  imposes  a 


584 


I 


4 


ADVERTISING  STANDARDS 


heavy  responsibility  upon  all  to  whom  the  future  of  advertising 
is  a  serious  matter. 

It  is  difficult  for  an  advertising  man  to  believe  that  there  is 
anybody  still  living  who  does  not  approve  of  advertising  as  a 
factor  in  modern  business.  Advertising  men,  however,  are  few 
m  number  compared  with  those  who  are  ignorant  of  more  than 
the  bare  externals  of  advertising.  The  great  mass  of  people 
who  have  no  means  of  knowing  what  advertising  is  or  how  it 
operates  either  believe,  or  may  be  led  to  believe,  that  any 
attempt  to  influence  demand  involves  a  needless  cost.  They 
argue,  therefore,  that  advertising  necessarily  imposes  an  extra 
burden  upon  the  process  of  getting  merchandise  from  the  large- 
scale  producer  to  the  small-scale  consumer. 

This  compUation  of  articles  describing  advertising  methods 
has  been  made  with  the  hope  that  it  might  help  to  convey  a 
clearer  idea  of  what  is  meant  when  it  is  declared  that  adver- 
tismg  is  not  necessarily  an  added  burden  on  distribution,  but 
that  it  is  an  integral  part  of  the  distribution  process  in  many 
Imes  of  commerce.  An  attempt  has  also  been  made  to  present 
a  few  details  serving  to  show  that  advertising  methods  are  in 
process  of  constant  betterment.  Untruth  is  being  attacked 
remorselessly;  every  effort  is  being  made  to  eliminate  waste; 
and  there  is  a  continuous  endeavor  to  make  advertising  more 
nearly  what  it  should  be— the  most  valuable  of  aids  to  the 
reduction  of  seUing  costs. 


APPENDIX 

Officers,  National  Commission  and  Departmental 
Organizations  of  the  Associated  Advertising  Clubs 
of  the  World  for  1915-1916;  and  the  Standards  of 
Practice  adopted  by  the  various  Departmental  Or- 
ganizations. 

OFFICERS 
Herbert  S.  Houston       Lafayette  Young,  Jr.        P.  S.  Florea 

President  Vice-President  Secretary-Treasurer 

National  Headquarters,  Merchants  Bank  Building^  bidianapolis,  Ind. 


WILLIAM  WOODHEAD 
WALTER  B.  CHERRY 
W.  C.  D'ARCY 
WILLIAM  H.  INGERSOLL 


Executive  Committee 

WILSON  H.  LEE 
A.  M.  BRIGGS 
WILLIAM  H.  JOHNS 
J.  CLYDE  OSWALD 
E.  T.  MEREDITH 


A.  E.  CHAMBERLAIN 
FRANK  A.  BLACK 
FRANK  H.  ROWE 
W.  W.  CLOUD 


National  Educational  Committee  National  Vigilance  Committee 

L.  E.  PRATT,  Chairman  (Candler  BIdg.,       MERLESIDENER  Chairman  (1206  Mer- 
Times  Square)  New  York  City.  chants  Bank  Bldg.)  Indianapohs,  Ind. 

National  Exhibit  Committee 

I.  F.  PASCHALL,  Chairman  (Care  Farm  Journal, 
Washington  Square)  Philadelphia,  Pa. 

THE  NATIONAL  COMMISSION 

William  H.  Ingersc«-L,  Chairman  (Robt.  H.  IngersoU  &  Bro.)  New  York. 
O.  C.  HaRN,  Vice-chairman  (National  Lead  Co.)  New  York. 


Advertising  Agents 

Stanley  Clague  (Taylor-Critchfield-Clague 
Co.)  Chicago.  ^ 

William  H.  Johns  (George  Batten  Com- 
pany) New  York. 

William  C.  D'Arcy  (D'Arcy  Advertising 
Company)  St.  Louis. 

Agricultural  Publications 

E.  T.  Meredith  (Successful  Farming)  Des 

Moines. 
Thomas  A.   Barrett   (Orange  Judd  Com- 

p>any)  New  York. 
H.  C.  Klein  (Webb  Publishing  Company) 

St.  Paul. 

Association     of     American     Directory 
Publishers 

Wilson  H.  Lee  (Price  &  Lee)  New  Haven. 
G.   D'W.   Marcy   (Sampson   &  Murdock) 

Boston. 
R.  H.   Donnelley   (731   Plymouth  Court) 

Chicago. 

General  Advertisers 

William  H.  IngersoU  (Robt.  H.  Ingersoll 
&  Bro.)  New  York. 


O.  C.  Ham  (National  Lead  Company) 
New  York. 

G.  B.  Sharpe  (DeLaval  Separator  Com- 
pany) New  York. 

Magazines 

C.  Henry  Hathaway  (Good  Housekeeping) 
New  York. 

Charles  D.  Spalding  (The  McCall  Com- 
pany) New  York. 

Don  M.  Parker  (The  Century  Company) 
New  York. 

Newspapers 

H.  L.  Rogers  (Chicago  Daily  News) 
Chicago. 

Louis  Wiley  (New  York  Times)  New  York. 

W.  F.  Jones  (Minneapolis  Journal)  Minne- 
apolis. 

Poster  Advertising 

Kerwin  H.  Fulton  (Van  Beuren  and  N.  Y. 

Bill  Poster  Co.)  New  York. 
E.  Allen  Frost  (29  S.  La  Salle  St.)  Chicapo. 
John    E.    Shoemaker     (Washington     Bill 

Posting  Company)  Washington,  D.  C, 


i 


APPENDIX 


Outdoor  Advertisinf 

Thomas  Cusack    (Thomas  Cusack   Com- 
pany)  Chicago. 

Ywk  ^*^"  ^^^'^^  Avenue  Bldg.)  New 
^ClefelJSd.^"^^"    ^^^^  ^'  ^^^  S'- 

Printing  and  Engraving 

"Phide?phia^^     ^'''''''''    *    M^«8) 
^YOTk^^***'*  <Wmiam  Green,  Inc.)  New 

Religious  Press 

^YoS^*  Mclndoe  (The  Continent)  New 
J- !"•  Jacobs  (Jacobs  &  Company)  Clinton. 

""^L^.-  £^}^^  (Catholic   Standard   and 
Tmies)  Philadelphia. 


Retail  Advertisers 

''^yf  B^S.  ^^™-  ^'^^'^  Son',  Com. 
%S/dS.  ^"^i^^^^-Goettinger  Com- 
^  oltSit!^''*'  (Thoreen-Seelye  Company) 
Business  Press 

''^New^Yoi-k  ^'"^'^  (American  Printer) 
^NSJ^YoVk^^'^  ^'^^  ^"**  ^^^  J°"™^»> 

Specialty  Advertising 


Affiliated   Associations  of  Advertising 
Agents  ^ 

^l^iU?^'^^^  9^^«^'  care  Taylor^ritch- 
field-Clague  Co.,  Chicago,  111. 

nL.       XT-    ^Vf"?^*?;   care   Sherman    & 
Bryan,  New  York  City. 

Agricultural  Publishers'  Ass'n. 

^S'o^if  ■  ^"^^^'''  ^®  ^-  ^^^^  ^^"  ^^■ 

Sec,   Frank  E.  long,  537  S.  Dearborn  St.. 
Chicago.  111. 

Association  Amerfcan  Directory  Pub- 
lishers 

^^'•i^'?u^-  Iprchiana,  i08  S.  4th  St.. 
Philadelphia,  Pa. 

^inJ^^Q*;  &  ^™i^i?'  ^^^  ^"^  JEndicott 
Bldg.,  St.  Paul,  Minn. 

Association  National  Advertisers 

^^/  J^?"^  Tipper,  Fifth  Ave.  Bldg..  2W 
o  ^'^5^  ^yc..  New  York  City. 
Sec..  C.  W.  Patman.  Fifth  Ave.  Bldg.,  200 
Fifth  Ave.,  New  York  Cicy. 

Associated  Retail  Advertisers 

Pres..  Frank  A.  Black,  care  Wm.  Filene's 

bon  s,  Boston,  Mass. 
Sec.,  P.  T.  Irish,  care  Thorsen-Seelye  Co.. 

Inc..  Detroit,  Mich.  ' 

Direct  Mail  Advertising  Association 

Pr^.,   Homer  J.   Buckley,   care  Buckley. 
Dement  Co..  605  S.  Cfck  St.,  ChicagSi 

^A  ^enneth  MacNichoI,  Eytinge  Service, 
44  Bromfield  St..  Boston,  Ma^. 

Federation  of  Trade  Press  Associations 
Pres.,  A.  A.  Gray,  Electrical  Review,  608 
South  Dearborn  St.,  Chicago,  111. 

ri:.S"?2:  A"*^  ^^ark,  American  OU  & 
Paint  Dealer.  411  N.  lOth  St. 


DEPARTMENTAL  ORGANIZATIONS 


Financial   Advertisers'   Association 

PrM .   John    Ring,   Jr..   care    Mercantile 

1  rust  Co.,  St.  Louis. 
Sec,,  H.  C.  Swartz.  care  Cleveland  Trust 

Co..  Cleveland,  O. 

Graphic  Arts  Association 

Chairman.  H    K.  Cooke.  625  W.  43d  St.. 
New  York  City. 

National  Association  Advertising  Spa- 
cialty  Manufacturers 

Pres.,  Thep.  Gerlach.  Joliet.  111. 

Sec.,  E.  White.  R.  1001  Advertising  Bldg. 

Outdoor  Advertising  Association 

PrM.,   Charles   F.   Bryan,   care  Chas.   F 

Bryan  Co.,  Cleveland,  6. 

^*  *^-.^-  Jolw^son,  care  Thomas  Cusack 
Co.,  Chicago,  111. 

Poster   Advertising   Association,    Inc. 

Pr«.,  E.  L.  Ruddy,  care  E.  L.  Ruddy  Co., 

Toronto,  Ont.,  Canada. 
Sec,  John  H  Logeman,  1620  Steger  Bldg., 

Chicago,  111. 

Magazine  Department 

Pres..  C.  Henry  Hathaway,  care  Good 
Housekeeping,  New  York  City. 

Sec.,  Edear  G.  CrisweU,  5th  Ave.  Bldg.. 
New  York  City. 

Religious  Press  Association 

Pr^-,  John  D.  Emrich,  223  W.  Jackson 
Blvd.,  Chicago,  lU. 

Sec.,  J.  W.  Cjinger,  care  Christian  En- 
deavor World,  Boston,  Mass. 

Newspaper   Departmental 

Pres.,  Lafeyette  Young,  Jr.,  care  Dea 
Moines  Daily  Capital,  Des  Moines,  la. 

^'  ^J^\  9^'-  225  Fifth  Ave.  Bldg.. 
New  York  City,  N.  Y.  *  * 


APPENDIX 

STANDARDS  OF  ADVERTISING  PRACTICE 

On  this  and  the  following  pages  are  given  the  standards  of  practice  adopted 
by  the  Associated  Advertising  Clubs  at  the  Toronto  Convention,  June,  1914, 
for  the  several  departmental  branches  of  advertising: 

PREAMBLE 

Realizing  that  advertising  has  come  to  mean  service  to  mankind,  and  that 
Reciprocity  is  the  greatest  force  in  promoting  the  cause  of  human  brotherhood 
and  the  world's  progress,  and 

Believing  that  the  new  humanism  in  business  demands  recognition  of  the 
fact  that  all  men  are  interdependent  and  have  international  responsibilities 
which  can  be  best  conserved  by  setting  up  ideals  of  conduct,  and 

Wishing  to  secure  to  society  a  code  of  advertising  ethics  by  means  of  which 
the  members  of  each  department  of  advertising  can  gauge  their  own  conduct 
and  also  that  of  their  fellows; 

Now,  therefore,  we,  the  members  of  the  Associated  Advertising  Clubs  of  the 
World,  in  Tenth  Annual  Convention  assembled,  at  Toronto,  June  25,  1914, 
do  acclaim  and  publish  the  following  Standards  of  Practice  for  the  various 
departments  represented  at  this  meeting,  and  do  individually  pledge  ourselves 
to  co-operate  one  with  another  in  living  up  to  them  as  the  best  standards  of 
right  action  now  attainable  for  all  those  engaged  in  the  business  of  advertising. 

Committee: 

William  H.  Ukebs,  Manlet  M.  Gillam, 

New  York.  New  York. 

AGRICULTURAL  PUBLICATIONS 

Believing  that  the  growth  of  farm  publications,  both  in  a  business  way  and 
m  their  usefulness  to  the  farm  reader,  depends  upon  certain  fundamental 
practices,  the  wisdom  of  which  the  agricultural  publishers  generally  recognize, 
we  set  forth  the  following  as  an  exposition  of  those  practices: 

1.  To  consider  the  interests  of  the  subscriber  first  in  both  editorial  and 
advertising  columns. 

2.  To  conduct  our  editorial  columns  with  truth  in  a  fearless,  forceful  manner, 
and  in  the  interests  of  better  farming  conditions  and  better  farm  home  condi- 
tions. .1       . 

3.  To  keep  them  clean  and  independent  of  advertising  considerations  and 
to  measure  all  reading  matter  by  its  worth  to  the  subscriber. 

4.  To  decline  all  advertising  which  is  misleading,  which  does  not  conform  to 
business  integrity,  or  is  unsuited  to  the  farm  field. 

5.  To  pledge  ourselves  to  work  with  fellow  publishers  in  the  interests  of  all 
advertising  and  the  ultimate  success  of  the  advertiser. 

6S6 


580 


APPENDIX 


APPENDIX 


587 


t 


1^^ 


7.  To  allow  agent's  commission  to  recognized  advertisinff  acents  onlv   anrl 
under  no  circumstances  extend  the  concession  to  the  adverSferT^t  ^' 

8.  To  make  editorial  merit  of  our  publications  the  basis  of  circulation  effort 
9^  To  supply  advertisers  and  advertising  agents  with  full  information  rP 

^mg  the  character  and  extent  of  circulSioS:  includingXtaUed TirXion 
statements  subject  to  proper  and  authentic  verification.  circulation 

puWicaTbSITo^^fiSirS!'''"'^  *"'  "^^^  ""  ^^^^'"^'^^^  ^^-'<^^  «ther 
we^ierJe  t^d'f'^^^Y '"  -^^  ^'^^^^  ^^^  ^*'«^^  '"^^t»«°  ^^  ^^e  field  which 

DCS  I^ines.  la.  ^''""^   Ra^eTwis 

BUSINESS  PAPERS 

caiS^VBSe«lH*W?^  ^P*'  ^ould  dedicate  his  best  efforts  to  the 
cause  of  Business  and  Social  Service,  and  to  this  end  should  pledffc  himself- 

1.  To  consider,  first,  the  interest  of  the  subscriber.  ^     * 

2.  To  subscnbe  to  and  work  for  truth  and  honesty  in  all  departments 
colum^,  l^tT^L'"  r  i"  ^  ?^^y^'  ^  ^'"^^^  opinions  fr^m  his  news 

IrJ;  1°  '^'"5  ***  P",^"'^  "P"?^"  ''^  reading  notices,  or  paid  "write-uDs"-  to 
keep  his  reading  columns  independent  of  Advertising  consideratior^  and  fn 
m«isure  aU  news  by  this  standard:  "Is  it  real  news?^  ^^^^^^^'^^^^^^^  ^^  *« 

5.  To  decline  any  advertisement  which  has  a  tendency  to  mislead  o-  wh.Vh 
docs  not  conform  to  business  integrity  «^«aaency  lo  mislead  o.  which 

ndtHn.  "^^"^^  ^'^"P"^'"  ^^^  advertising  solely  upon  the  merits  of  the  pul>. 
^!;' JV?PP*^*1''*.':^?  ""''^^  ^"^^  information  regarding  character  and  extent 

ad^rUsi^^k^*'  ^"^  *"  organizations  and  individuals  engaged  in  creative 
9.  To  avoid  unfair  competition. 

hc^^'rv^e?  InTttL'to^iv.  in"  ^'^^"f  ^°-^  ^'^'  ^^^*'«"  «^  '^^  ^^^^  ^^ich 
W  Tuker,  ""^^  legitimate  way  to  promote  that  function. 

New  York!  "^^  ^'  t^^^^!"* 

F.D.Porter,  .  ^ew\ork. 

Chicago.  ^-  ^- Y^«y» 

Chicago. 

DIRECT  ADVERTISING 
kmd  of  odvau^ufi  and  iu  proper  .pp«,ilioa  for'S?  p.r""urar Xd«ct?aU 


market  were  not  used.    The  only  forms  of  advertising  which  arc  best  for  any 
purpose  are  those  which  produce  the  most  profit. 

2.  To  bring  direct  advertising  to  the  attention  of  concerns  who  have  never 
realized  its  possibilities.  Many  concerns  do  not  advertise  because  they  do  not 
know  Uiat  advertising  can  be  started  at  small  expense.  They  confuse  adver- 
tising with  expensive  campaigns,  and  hesitate  to  compete  with  others  already 
doing  general  publicity. 

3.  To  determine  the  different  ways  in  which  direct  advertising  can  be  used  to 
effectively  supplement  other  forms  of  advertising  and  to  so  study  the  other 
forms  used  that  the  direct  advertising  may  become  a  component  part  of  the 
entire  publicity  plan. 

4.  To  study  the  special  advantages  of  Direct  Advertising  such  as  individuality, 
privacy  of  plan,  facility  for  accompanying  with  the  advertisement,  samples, 
postals,  return  envelopes,  inquiry  or  order  blanks,  ability  to  reach  sp)ecial 
groups  or  places,  personal  control  of  advertising  up  to  the  minute  of  mailing, 
and  other  recognized  advantages. 

5.  To  strengthen  the  bond  between  manufacturer  and  dealer  by  encouraging 
the  manufacturer  to  prepare  direct  advertising  matter  for  the  dealer,  so  well 
printed,  with  his  name,  address,  and  business  card  as  to  make  him  glad  to 
distribute  it,  providing  always  the  cost  of  special  imprinting  is  in  proportion 
to  the  benefits  to  be  derived. 

6.  To  take  advantage  of  the  opportunity  to  test  out  letters  and  literature 
on  a  portion  of  a  list  before  sending  them  out  to  the  entire  list.  Wherever  it 
is  possible  for  an  advertiser  to  approximate  in  advance  his  returns  from  his 
advertising  he  has  made  his  advertising  more  eflficient.  Direct  advertising 
makes  this  possible.  Testing  out  direct  advertising  campaigns  in  advance  does 
much  to  remove  the  element  of  chance. 

7.  To  consider  inquiries  as  valuable  only  as  they  can  be  turned  into  sales. 
An  inquiry  is  a  means  to  an  end — not  an  end  in  itself.  The  disposition  to 
consider  cost  per  inquiry  instead  of  cost  per  sale  has  led  many  a  firm  to  false 
analysis. 

8.  To  give  the  mailing  list  its  proper  importance.  Many  advertisers  use 
poorly  prepared  mailing  lists,  which  are  compiled  in  a  careless,  haphazard 
maimer,  and  never  take  the  trouble  to  check  them  up  or  expend  them.  Mailing 
lists  should  be  constantly  revised.  Poor  lists  and  old  lists  cost  money  in  two 
ways — one  by  missing  good  prospects,  and  thereby  losing  sales,  and  the  other 
by  money  spent  on  useless  names. 

9.  To  encourage  the  use  of  direct  advertising  as  an  educational  factor  within 
their  orf^anizations  with  sales  forces  and  dealers.  Many  concerns  have  raised 
their  standards  of  efficiency  through  the  use  of  letters,  house-organs,  bulletins, 
mailing  cards,  folders,  etc. 

10.  To  champion  direct  advertising  in  the  right  way.  General  publicity  and 
direct  advertising  are  two  servants  of  business,  and  each  has  its  place  and  its 
work  to  do.  No  form  of  advertising  should  ever  attack  another  form  of  adver- 
tising as  much. 

Homer  J.  Buckley,  0.  U.  Chamberlain, 

Chicago,  111.  Chicago,  HI. 

DIRECTORIES 

The  publisher  of  a  directory  should  dedicate  his  best  efforts  to  the  cause  of 
business  uplift  and  social  service,  and  to  this  end  should  pledge  himself: 
1.  To  consider,  first,  the  interest  of  the  user  of  the  book. 


A\ 


5B6 


APPENDIX 


me*ntJ°  ""^^"^  ***  *"**  ''^'^  '**'  "^"^  Honesty,  and  Accuracy  in  aU  dcpart- 

3.  To  avoid  confusing  duplications  of  listings,  endeavoring  to  classify  every 
concern  under  the  one  heading  that  best  describes  it,  and  to  treat  addition^ 
listing  as  advertising,  to  l^e  charged  for  at  regular  rates.  aaoitional 

« J;»  increase  pubhc  knowledge  of  what  directories  contain;  to  study  public 
«n^  y" -r"!-^  directories  to  supply  them;  to  revise  and  standardize  methods 
and  classifications,  so  that  what  is  wanted  may  be  most  easily  found,  and  the 

t^r^^  7b':;eVt:X'^^^^  "^^^ ''  ^  '"^^^  ^^'  -^-^  referenrb<L\^ 

do^s  J^t t±rm  t^  Slrin"^'  '^^  '  '^"'^"^^  *°  ^'^^'^^  ^  ^^^^^ 
licati J^.'**"'''^  subscriptions  and  advertising  solely  upon  the  merits  of  the  pub- 

7.  To  avoid  misrepresentations  by  statement  or  inference  regarding  circula- 
tion, p  acmg  the  test  of  reference  publicity  upon  its  accessibUity  to  Si 
rather  than  on  the  number  of  copies  sold.  ^       secKers, 

creative  XSngtV^P"""*  organizations  and  individuals  engaged  in 
9.  To  avoid  unfair  competition. 

funclLr  "»<'*'»«»  to  »l"ve  in  every  legitimate  way  to  promote  that 

Boston. 

GENERAL  ADVERTISERS 

.A^^}-""^  our  obligation  and  responsibility  to  the  public,  to  the  seller  of 
advertising  service,  the  advertising  agent  and  our  own  organization,  we  Z 
general  advertisers,  pledge  ourselves  as  follows:  "i/»"on.  we.  as 

poJtiolT^f^hlch  Ifs:"  e.  ^'  '''  P"'"^  '^^^°^^^*'  ^°^  P"^^^^-^y  ^^-^ 
candlw^  ''*'  °'*''^'  ^"^  ^  "'^'**^  *  ^"^^  *^'  ^  ^"^  advertising  than  we 

3.  To  refrain  from  statements  in  our  advertising  which,  throueh  actual 
misrepresentation  through  ambiguity  or  through  incLpleSle^^reW  to 
be  misleadmg  to  the  public,  or  unjust  to  competitors. 

4.  To  use  every  possible  means  not  only  in  our  own  individual  advertising 
verti^sL'Semen^s.^^^  «M,peration.  to  increase  the  publics  confidence  in  J-' 

5.  To  refrain  from  attacking  competitors  in  our  advertising. 

6.  lo  refram  from  imposing  upon  the  seller  of  advertising  service  uniust. 
ui^easpnable.  and  unnecessarily  irksome  requirements.  ^  ^^^ 
will  h.V'il  i}^  publishers,  when  requested,  technical  information  which 
^temlL            ^^^  ^^^      ^  ^"^^  ^"""^  advertising  columns  free  from  miV 

W  Jl!!-™""  ^'°?  »°^  discourage  deceptive  or  coercive  methods  in  securing 

O  J*'^''"'^  standards  for  ourselves  equal  to  those  we  set  for  others. 

New  Sk  ^^^'"2'  Tipper, 

^^''^^'*'-  New  York. 


APPENDIX 

MAGAZINES 


589 


We  believe  the  magazine  publisher  is  a  trustee  of  the  millions  of  homes 
whose  entertainment  and  cultivation  he  strives  to  promote,  and  we  therefore 
set  up  the  following  standards  in  the  light  and  obligation  of  his  trustee- 
ship: 

1.  We  commit  ourselves,  without  reservation,  to  the  Truth  emblem  of  the 
A.A.C.ofW. 

2.  We  commit  ourselves  to  ceaseless  vigilance  to  see  that  every  advertise- 
ment we  publish  shall  measure  up  to  tbat  Truth  emblem. 

3.  We  commit  ourselves  to  stand  at  all  time  for  clean  and  wholesome  editorial 
and  text  matter  and  free  from  advertising  influence. 

4.  We  commit  oufselves  to  our  advertisers  and  agents  to  maintain  an  abso- 
lute uniformity  of  advertising  rates, 

5.  We  commit  ourselves  to  definite  statements  and  to  independent  audits, 
showing  the  quantity  and  distribution  of  our  circulation. 

6.  We  commit  ourselves  to  maintaining  the  highest  standards  of  character 
and  c^)acity  in  appointing  advertising  agents. 

7.  We  commit  ourselves  to  continued  opposition  to  free  press  bureaus  and 
other  agents  for  free  publicity. 

8.  We  commit  ourselves  to  consider  all  matter  for  the  publication  of  which 
we  accept  payment  as  advertising  matter,  and  to  so  mark  it  that  it  will  be 
known  as  such. 

9.  We  commit  ourselves  to  continue  to  give  our  constant  attention  to  the 
physical  presentation  of  advertising,  in  the  way  of  paper,  press  work,  and 
general  typographical  excellence  to  the  end  that  advertising  may  secure  its 
highest  possible  efficiency. 

10.  We  commit  ourselves  to  fair  and  friendly  competition  both  toward  our 
fellow  periodical  publishers  and  toward  all  other  competitors  selling  legitimate 
advertising  of  whatever  form. 

11.  We  commit  ourselves  to  work  always  with  increasing  zeal  to  do  everything 
in  our  power  to  advance  the  cause  of  advertising  as  the  great  modem  servant 
of  the  business  world  and  of  the  general  public. 

Lee  W.  MaxweU,  H.  R.  Reed, 

New  York.  New  York. 

GENEJRAL  ADVERTISING  AGENTS 

Realizing  the  increased  responsibilities  of  the  general  advertising  agent,  due 
to  the  enlarged  scope  and  requirements  of  modern  agency  service,  every  agent 
should  use  his  best  eflForts  to  raise  the  general  standards  of  practice,  and  should 
pledge  himself: 

1.  To  first  recognize  the  fact  that  advertising,  to  be  efficient,  must  deserve 
the  full  confidence  and  respect  of  the  public,  and,  therefore,  to  decline  to  give 
service  to  any  advertiser  whose  publicity  would  bring  discredit  on  the  printed 
word. 

2.  To  recognize  that  it  is  bad  practice  to  imwarrantably  disturb  the  relations 
between  a  cUent  and  an  agent  who  is  faithfully  and  efficiently  serving  such 
client. 

3.  To  permit  no  lowering  of  maximum  service  through  accepting  any  new 
client  whose  business  is  in  direct  competition  with  that  of  a  present  client  with- 
out the  full  knowledge  of  both  parties. 


590 


APPENDIX 


APPENDIX 


501 


9 


K„**  ''?.* ^**^*^  "."^*f  competition,  resolve  to  carry  into  practice  the  eouitahlp 
fcThe  fnr'^""^^- '■*"  ;  ^°d  determine  that  ih! minir^uMTar^toZlv^^ 
SLr  /  co°imi«?ion  a  lowed  to  recognized  agencies,  and  that  no  rebaVe? 
discounts,  or  variations  of  any  kind  be  made,  except  those  reg^larlv  allowed 

ln7:?^iiaTali;"'  ^"^'  ''^''  ^^-^  -  -'>'  ^  geneX?nn*:e1 

of  ^^Il'^^rrr^""'^  advertising  expenditures  by  making  investigation  in  advance 
wjii  J^*-*""^  surrounding  a  contemplated  campaign,  by  counse  hng  de?a^ 
where  Preliminary  work  must  first  be  accomplished;  aSdb/usbgeverf  effort 
to  establish  the  right  relation  and  coK,peration  between  ad vertilglndJrng 

contiJue7nv'U5i,*i*'mfJ!r'*^'?.-^  copy,  exaggerated  statements,  and  to  dis- 
continue  any  wilful  misrepresentation  of  either  merchandise  or  values 

7  lo  recommend  to  all  advertising  mediums  the  maintenance  of  eauable 
and  uniform  rates  to  all  advertisers  alike,  and  the  maintenan^  of  u25orm 
rates,  terms,  and  discounts  to  aU  recognized  agents  alike. 
„  ^A  ^''/^''^''.l  information  as  to  the  volume  of  circulation  of  any  medium 
used  and  specific  detail  as  to  the  distribution  of  this  circulatL  U,th  terr^ 
tonally  and  as  to  class  of  readers.  In  figuring  the  value  of  a  Sm  to  rerrd 
mformation  as  to  the  method  of  obtaining  this  circulation  and  Se  care  in 
auditing  this  circulation  as  an  essential  consideration  in  estimating  its  worS 

0.  To  discountenance  the  issuance  of  agency  house-organs  solid  i^g  or  «;„- 
taming  paid  advertising  from  owners  of  ^&ce.  so"uimg  or  con- 

fi         P.u^"^"''^   continued   progress   toward   better  professional   standards 
through  the  appomtment  of  a  standard  of  Agency  Practice  SmSe    to 
whom  all  suggestions  shall  be  referred  during  the  coming  >4r  and  who  shaH 
report  their  recommendations  at  the  next  annual  conveXn^  " 

estiblil^rersUnda;^^^^^^^  ^^«^°°  ^'  -^-^^>-«  -  ^^s  effort  to 

W.  H.  JohnSt  n   u    Tn    1 

New  York  City.  ""'New^Ytk  cliy. 

HOUSE-ORGANS 

In  order  that  the  house-organ  shall  have  a  clear  field  for  its  develooment 
along  Imes  of  efficient  and  practical  service  in  the  advertising  field  the  foUow 
mg  standards  of  Practice  for  House  Organs  is  respectfully  recomm;nded 
onb-  f^r  lIXal^cILiSeXr.  advertisements  as  favors  or  concessions,  but 
f  J.1  J"*  ""^T'  ^l  *  ^^"^  ''^^  profitable  rate,  for  all  circulation  which  does  not 
orgi'rfs^t^*^  ""'"^  ""'  '^'  "^^^^  "'^^  P"^«-«  ^-  which  the'ous^* 

3.  To  decline  any  advertisement  which  has  a  tendency  to  mislead  or  which 
is  not  otherv^ise  in  accord  with  good  business  practices. 

4.  lo  exchange  circulation  with  other  house-organ  publishers  with  the  ide» 

and  purpose  of  rncreas  ng  the  effectiveness  of  house-organs  genemlW 

5    To  give  full  credit  to  those  to  whom  credit  is  justly  due  for  aU  subiect 
matter  taken  from  other  pubhcations  subject 

house'^'igaT"^'  originality  in  the  make-up  and  reading  matter  of  the  individual 

7.  To  publish  nothing  but  the  truth. 

8.  To  promote  the  spirit  of  optimism,  thereby   making   the   house-ori?an 
always  a  message  of  good  cheer  and  encouragement.  ^ 


J>.  To  avoid  derogatory  references  to  all  competitors. 

10.  To  have  it  understood  and  declared  that  the  house-organ  publisher 
recognizes  the  rights  and  purposes  of  the  respective  trade  publications,  and 
that  the  house-organ  is  not  to  supplant,  but  to  supplement,  the  trade  papers. 

George  Walker,  Clifton  D.  Jackson, 

St.  Loub.  Mount  Clemens.  Mich. 

NEWSPAPERS 

It  is  the  duty  of  the  newspaper: 

1.  To  protect  the  honest  advertiser  and  the  general  newspaper  reader  as  far 
as  possible  from  deceptive  or  offensive  advertising. 

2.  To  sell  advertising  as  a  commodity  on  the  basis  of  proven  circulation  and 
the  service  the  paper  will  render  the  manufacturer  or  the  merchant;  and  to 
provide  the  fullest  information  as  to  the  character  of  such  circulation  and  how 
procured. 

S.  To  maintain  uniform  rates,  according  to  classifications,  and  to  present 
those  rates,  as  far  as  possible,  in  a  uniform  card. 
4.  To  accept  no  advertising  which  is  antagonistic  to  the  public  welfare. 
a.  To  effect  the  largest  possible  co-operation  with  other  newspapers  in  the 
same  field  for  the  establishment  and  maintenance  of  these  standards. 

Allen  D.  Albert,  Minneapolis,  Minn. 

Lafayette  Young,  Des  Moines,  Iowa. 

R(At.  J,  Virtue,  Chicago,  111. 

Edward  Bode,  Chicago,  111. 

Louis  Wiley,  New  York,  N.  Y. 

P.  M.  Walker,  Fort  Smith,  Ark. 

John  T.  Imrie,  Toronto,  Ontario. 

OUTDOOR  ADVERTISERS 

1.  Every  outdoor  advertising  plant  must  continue  to  refuse  all  misleading, 
indecent,  and  illegitimate  advertising. 

2.  Every  outdoor  advertising  plant  should  refuse  all  advertbing  whicn  savors 
of  personal  animosity,  as  ours  is  strictly  an  advertising  medium. 

8.  All  advertising  contracts  should  be  started  on  date  contracted  for. 

4.  Every  client  should  be  furnished  promptly  upon  completion  of  his  display 
with  a  list  showing  all  locations,  and  plant  owners  should  at  all  times  assist 
clients  to  check  displays. 

5.  Every  outdoor  advertising  plant  should  be  maintained  in  the  best  con- 
dition possible,  both  from  the  standpoint  of  appearance  and  stability. 

6.  All  locations  for  outdoor  display  should  be  selected  where  the  traffic  is  such 
that  it  ensures  the  best  circulations  for  the  article  advertised. 

7.  Care  should  be  exercised  by  every  plant  owner  in  the  selection  of  locations 
so  as  not  to  cause  friction  either  with  the  municipal  authorities  or  the  people 
of  the  neighborhood. 

8.  A  rule  of  one-rate-to-all  and  one  high-grade  class  of  service  to  every  ad- 
vertiser must  be  rigidly  maintained. 

9.  Every  effort  should  be  made  to  constantly  raise  outdoor  advertising  copy 
to  the  maximum  efficiency  in  policy,  ideas,  and  execution. 

10.  Recognizing  the  great  power  of  our  medium,  we  should  use  it  for  the 
general  good  by  devoting  space  to  matters  of  general  happiness  and  welfare. 


502 


APPENDIX 


APPENDIX 


593 


W 


II 


11.  We  believe  in  close  association  among  members  of  our  own  brancb  of 
advertising  to  the  end  that  greater  eflficiency  be  attained  through  the  inter* 
change  of  ideas. 

12.  We  believe  in  hearty  co-operation  between  the  outdoor  advertising  in- 
terests and  all  other  legitimate  branches  of  publicity. 

13.  We  believe  in  the  solicitation  of  business  on  the  basis  of  respect  for  the 
value  of  all  other  good  media. 

14.  We  believe  in  dissuading  the  would-be  advertiser  from  starting  a  cam- 
paign, when,  in  our  judgment,  his  product,  his  facilities,  his  available  funds, 
or  some  other  factor,  makes  his  success  doubtful. 

0.  J.  Gude,  E.  L.  Ruddy, 
New  York.  Toronto. 

PHOTO-ENGRAVERS 

The  photcxngraver,  realizing  the  importance  of  his  calling  and  the  influence 
his  products  wield  upon  humanity  at  large  and  business  in  particular,  volun- 
tarily sets  up  the  following  standards  to  serve  as  a  guide  in  his  relations  with 
the  public  and  pledges  himself  to  observe  them  faithfully: 

1.  Being  the  interpreter  of  art  and  the  manufacturer  of  a  sales-producing 
medium,  he  commits  himself  unqualifiedly  to  truth. 

2.  To  co-operate  with  all  organizations  and  individuals  engaged  in  upUftmg 
advertising  in  all  its  branches. 

3.  To  remove  all  mystery  and  misrepresentations  surrounding  his  craft  and 
his  products,  and  to  at  all  times  welcome  an  opportunity  to  explain  its  intri- 
cacies to  any  one  interested. 

4.  To  study  the  requirements  of  his  customer  and  to  give  the  latter  the 
benefit  of  his  expert  experience  and  advice,  so  that  the  buyer  of  engravings 
may  consider  them  a  sound  investment  instead  of  an  expense,  and  profit  by 
their  use. 

5.  To  serve  the  public  to  the  best  of  his  knowledge  and  ability  for  a  fair 
remuneration. 

6.  To  know  his  costs,  and  to  maintain  at  all  times  a  standard  of  charges  that 
will  honestly  cover  all  costs  of  service  rendered  both  in  the  preliminary  prepara- 
tion of  work  and  in  its  execution,  and  to  prohibit  all  gratuitous  service  or 
delivery  of  value  without  full  compensation. 

7.  To  stand  upon  the  fact  that  the  cost  for  making  photo-engravings  is  the 
same  for  one  buyer  as  for  another,  and  that  he  who  buys  to  sell  again  should 
charge  his  customer  a  fee  for  the  value  of  the  service  which  he  individually 
renders. 

8.  To  avoid  the  making  of  false  promises  and  the  disappointments  and  losses 
connected  therewith,  and  to  undertake  to  do  no  more  than  the  plant  is  equipped 
to  handle  efficiently. 

9.  To  educate  the  buyer  of  engravings  in  the  technical  knowledge  necessary 
for  him  to  buy  them  intelligently,  to  bring  him  up  to  an  appreciation  of  "Quality" 
in  engra\'ings. 

10.  To  stand  ready  at  all  times  to  do  his  share  toward  improving  not  only 
his  own  product,  but  to  disseminate  knowledge  concerning  its  proper  use,  to 
raise  the  standard  of  advertising  from  the  purely  materialistic  to  the  artistic, 
and  to  add  to  its  sales  efficiency  by  all  means  within  his  power. 

Louis  Flader,  George  Bridgen, 

Chicago.  ToronUx 


III 


PRINTING 

The  members  of  the  Department  of  Printing  and  Engraving  of  the  Associated 
Advertismg  Clubs  of  the  World  dedicate  their  best  efforts  to  busmess  uphft 
and  social  service  and  to  this  end  pledge  themselves: 

1.  To  give  full  value  for  every  dollar  received. 

i  To  charge  fair  prices,  viz.,  known  cost  plus  a  reasonable  profit. 

3.  To  subscribe  to  and  work  for  truth  and  honesty  in  busmess;  to  avoid 
substitution,  broken  promises,  unbusinesslike  methods.  ...  , . 

4.  To  co-operate  in  establishing  and  maintaining  approved  busmess  ethics. 

5.  To  be  original  producers  and  creators,  not  copyists. 

C  To  be  promotive,  looking  to  the  needs  of  the  customer,  analyzing  tus 
requirements  and  devising  new  and  effective  means  for  promotmg  and  extend- 
ing his  business.  .       ,  .  -     ^    ^i.         ,. 

7.  To  place  emphasis  upon  quality  rather  than  price,  service  to  the  customer 

being  the  first  consideration.  ^  ,     i-  .  .    .t       •  •* 

8/ To  merit  the  support  of  buyers  of  theu-  produce  by  hvmg  up  to  the  spirit 

as  well  as  the  letter  of  these  standards.  .      ,  .,      *        •  *  j 

9   To  develop,  by  co-operation  with  other  departments  of  the  Associated 

Advertising  Clubs,  an  ever-strengthening  bond  of  union  to  the  end  that  the 

service  rendered  to  advertising  by  the  graphic  arts  may  achieve  its  highest 

10.  To  aid  in  securing  just  and  harmonious  relations  between  employer  and 
employed  by  esUblishing  honorable  conditions  of  employment. 

Henry  D.  Porter,  ^'  ^'  DormMy, 

Boston.  Chicago. 

RELIGIOUS  PUBLICATIONS 

SUndards  of  practice  apply  equally  to  all  classes  of  publishers,  whether  they 
issue  religious  or  secular  journals;  but  they  apply  m  »  yeY^Pf^^';  ^"^^u 
those  who  publish  reUgious  papers  and  who  should  stand  for  the  highest  possible 

ethics;  therefore: 

1.  We  believe  in  truth  in  the  printed  word.   ,         .      .  . ,       ,  ...  ., 

2.  We  beUeve  that  religion  is  the  most  vital  force  m  the  world  and  that  the 
religious  publications  should  conduct  their  affairs  with  a  scrupulous  desu-e  to 
measure  up  to  the  sUndards  which  religion  prescribes.  .  ^ ,  .       .  ... 

3.  We  believe  that  the  reUgious  paper  should  be  faithful  to  its  conviction 
and  not  allow  business  expediency  to  swerve  it  from  its  purpose. 

4.  We  believe  that  religious  publications  should  be  kept  up-to-date,  edito- 
rialiy  and  typographically,  and  sold  on  their  merits.  . 

5  We  believe  in  eUminating  personal  opinions  in  the  news  columns;  m  being 
a  leader  of  thought  in  the  editorial  columns,  that  criticism  should  be  construe- 

*^6."  We  believe  that  unreliable  or  questionable  advertising  has  no  place  m 

'*^7f  We  b^Ue^  STertisers  and  advertismg  agents  should  be  furnished  with  a 
verifiable  statement  of  circulation.  r  •*  ♦•  „. 

8.  We  believe  in  discouraging  the  "Me  too"  form  of  advertising  sohcitation, 
every  publication  should  stand  on  its  own  merits.  j  ■  j-  •  j  .„i 

9.  We  believe  in  lending  a  hand  with  aU  other  organizations  and  mdividuala 
eogaged  in  the  movement  of  business  integrity. 


594 


APPENDIX 


APPENDIX 


595 


10.  We  believe  in  service— ficrvice  to  God,  service  to  mankind— and  that  the 
religious  publication  is  under  obligation  to  encourage  all  movements  for  a 
better  mutual  understanding  among  men. 

Walter  J.  Mclrube,  Charles  Stelzle, 

New  York.  New  York. 

Samuel  Reis,  Boston. 

RETAIL  ADVERTISERS 

Each  head  of  a  retail  enterprise  should  dedicate  his  best  efforts  to  the  cause 
of  business  uplift  and  to  this  end  should  pledge  himself: 

1.  To  consider,  first,  the  interests  of  his  customers. 

2.  To  insist  on  the  courteous  treatment  of  every  visitor. 

3.  To  permit  no  misrepresentation. 

4.  To  discourage  careless,  slurring,  or  offensive  statements  on  the  part  of 
salespeople. 

5.  To  avoid  misrepresentation  or  careless  indifference  in  advertising. 

6.  To  see  that  comparison  values  in  printed  announcements  are  with  prices 
previously  prevailing  in  his  store,  unless  otherwise  distinctly  stated. 

7.  To  avoid  the  use  of  such  expressions  as  "Were  $10,"  "Value  $10,"  "Else- 
where $10,"  "Made  to  Sell  at  $10."  "The  $10  Kind,"  etc.,  where  their  use 
would  give  a  misleading  impression  to  the  reader. 

^  8.  To  resent  strenuously— to  the  point  of  withdrawal,  if  necessary— the 
"make-up"  of  his  advertising  in  a  newspaper  next  or  near  announcements 
offensive  to  good  taste  or  of  a  debasing  nature. 

9.  To  demand  of  each  newspaper  evidence  of  the  approximate  number  of  ita 
readers  (based  on  copies  actually  sold),  their  general  location  and  character, 
and  a  statement  as  to  how  they  were  secured — by  voluntary  subscription,  by 
solicitation,  by  premium  or  gifts. 

10.  To  urge  on  newspapers  that  the  same  care  should  be  showTi  in  admitting 
advertising  to  their  columns  that  wpuld  be  shown  in  admitting  news  matter  to 
their  columns  or  in  expressing  editorial  opinion  there;  that  the  newspaper 
should  feel  itself  as  responsible  for  the  verity  and  propriety  of  advertising  and 
news  in  its  columns  as  for  its  editorials — always  giving  assurance  that  he  will 
welcome  just  criticbm  of  his  own  advertising. 

MarUy  M.  Gillam,  p.  A.  Black, 

New  York.  Boston. 

SPECIALTY  ADVERTISING  MANUFACTURERS 

The  members  of  the  Specialty  Advertising  Department  of  the  Associated 
Advertising  Clubs  of  the  World,  recognizing  the  sense  of  personal  responsi- 
bility and  co-operation  as  to  the  spirit  of  the  times,  subscribe,  in  the  following 
standards  of  practice,  to  their  obligations  to  each  other,  to  the  people  in  their 
employ,  to  the  advertiser  who  uses  their  goods,  and  to  the  great  consuming 
public: 

1.  We  recognize  that  with  the  rapid  advance  being  made  in  the  appraisal  of 
the  value  of  the  advertising  mediums,  that  the  interests  of  the  user  and  the 
maker  of  specialties  are  identical.  It  is,  therefore,  our  aim  to  so  study  the 
needs  of  the  advertiser  that  we  shall  not  simply  make  goods  for  him,  but  shall 
render  him  a  valuable  service. 

2.  We  each  pledge  ourselves  at  all  times  to  avoid  effort  to  secure  from  buyer 


or  seller  a  contract  for  either  merchandise  or  service  that  shall  invalidate  a 
similar  contract  then  in  force. 

S.  We  pledge  ourselves  to  carefully  observe  the  rights  of  each  other  in  original 
ideas,  models,  and  sketches,  proposed  for  specialties,  whether  these  rights  are 
safeguarded  by  law  or  not. 

4.  We  pledge  ourselves  to  reject  all  copies  submitted  for  use  on  specialties  which 
offends  truth,  decency,  or  propriety,  so  that  when  an  advertiser  is  justly  barred 
from  the  use  of  other  mediums  he  cannot  so  advertise  by  means  of  our  product. 

5.  Inasmuch  as  most  advertising  specialties  are  made  to  order,  we  pledge 
ourselves  to  employ  salesmen  only  who  adhere  to  truth  and  moderation  in  pre- 
senting claims  for  our  goods,  thus  avoiding  any  suspicion  of  misrepresentation, 
and,  furthermore,  we  shall  insist  that  every  order  shall  be  made  in  the  factory 
to  conform  exactly  to  sample  both  in  material  and  workmanship. 

6.  We  pledge  ourselves,  in  the  interest  of  both  the  salesman  and  buyer,  of 
advertismg  to  promote  in  every  way  possible  the  conviction  that  common 
interest  of  all  concerned  rests  up>on  uniform  prices  and  quality,  and  upon  ren- 
dering the  same  service  under  similar  conditions  to  all  users  of  specialties. 

7.  We  pledge  ourselves  to  maintain  proper  factory  conditions,  and  to  consider 
and  conserve  the  physical  and  moral  welfare  of  our  employees.  It  is  our  desire 
not  simply  to  foUow  in  this  work,  but  to  place  each  factory  devoted  to  the 
making  of  advertising  specialties  in  the  front  rank  of  enlightened  progress. 

8.  We,  each,  pledge  ourselves  to  the  adoption  as  soon  as  may  be  possible  of 
a  comprehensive  factory  and  sales  cost  system  to  the  end  that  capricious  and 
senseless  variations  and  changes  in  price  may  be  eliminated  in  the  interest  of 
fair  trade  and  the  protection  of  the  advertiser. 

9.  Finally,  we  oledge  ourselves  to  hearty  co-operation  with  all  other  responsi- 
ble mediums,  with  every  organization  and  every  movement,  of  whatever  kind, 
looking  to  the  real  betterment  of  the  advertising  business,  because  it  is  only  by 
broad  co-operation  and  understanding  that  the  best  service  can  be  rendered  to 
the  consuming  public  by  whom  we  are  supported,  and  for  whose  benefit  the 
business  of  advertising  exists. 

Charles  Q.  Peterson,  Theodore  R.  Gerlach, 

Chicago.  Joliet,  111. 

Lewellyn  E.  PraU,  Henry  B.  Hardenburg, 

New  York  City.  Brooklyn. 

SPECUL  STANDARDS  OF  PRACTICE  FOR  RETAIL  ADVERTISERS 
WHO  USE  THE  "TRUTH"  EMBLEM  OF  THE  A.  A.  C.  OF  W. 

Adopted  by  the  Executive  Committee  of  the  A.  A.  C.  of  W.,  Chicago,  De- 
cember 10,  1914,  as  the  pledge  to  be  subscribed  to  by  retail  advertisers  seeking 
license  to  use  the  "Truth"  emblem.* 

Each  head  of  a  retail  business  should  dedicate  his  best  efforts  to  the  cause 
of  Business  and  social  service,  and  in  his  advertising  should  pledge  himself: 

1.  To  tell  the  truth,  simply. 

2.  To  avoid  the  use  of  language  which  has  a  tendency  to  mislead. 

3.  To  avoid  making  claims  or  statements  that  are  extravagant,  or  carelessly 
indifferent. 


•Applications  from  retail  merchants  wishing  to  use  the  "Truth**  Emblem  must  be  made  to  the 
Chairman  of  the  National  Vigilance  Committee,  Mr.  Merle  Sidener,  920  Hume-Mansur  Building, 
ladianapolis,  Ind. 


596 


APPENDIX 


9:' 


■A 

.15  I 


h 


4.  To  guard  against  any  form  of  advertising  that  does  not  conform  to  the 
highest  standards  of  business  integrity. 

5.  To  see  that  comparison  values  in  printed  announcements  are  with  prices 
previously  prevailing  in  his  business,  unless  otherwise  distinctly  stated. 

6.  To  avoid  the  use  of  such  expressions  as  "Were  $10,"  "Value  $10,"  "  Else- 
where $10."  "Made  to  sell  at  $10,"  "The  $10  Kind,"  etc.,  where  their  use 
would  give  a  misleading  impression  to  the  reader. 

7.  To  give  careful  consideration  to  complaints  from  customers  and  to  be 
ready  to  make  good  any  faults  in  advertised  articles  or  to  refund  the  purchase 
price  when  the  purchaser's  dissatisfaction  cannot  be  otherwise  remedied. 

8.  To  show  a  right  spirit  toward  competitors  by  avoiding  unfair  advertising 
competition  or  disparaging  references  to  them  in  his  advertising,  either  directly 
or  by  innuendo. 

9.  To  resent  strenuously  the  "make-up"  of  his  advertising  in  a  newspaper 
next  or  near  announcements  offensive  to  good  taste  or  of  a  debasing  nature. 

10.  To  subscribe  to  and  work  for  truth  and  honesty  in  all  departments  of 
advertising  to  the  end  that  his  own  advertising  be  given  the  stamp  of  greater 
reliability. 

STANDARDS  OF  PRACTICE  FOR  LOCAL  CLUBS 

Some  of  the  local  ad  clubs  have  adopted  standards  of  Practice  to  which 
those  who  apply  for  membership  are  expected  to  subscribe,  and  for  the  sake  of 
bringing  into  one  declaration  the  experiences  of  many  clubs,  the  Association 
has  adopted  the  following,  which  some  clubs  print  on  the  reverse  side  of  mem- 
bership application  blanks,  including  in  the  application  a  statement  by  the 
praspective  member  that  he  subscribes  to  the  principles  set  forth: 

We  pledge  ourselves  to  remember  that  advertising  is  and  should  be,  first  of 
all,  an  exponent  of  the  square  deal,  and  that  it  is  oidy  when  business  men  put 
the  interest  of  the  buying  public  first  that  they  take  the  best  advantage  of 
their  opportunities. 

We  will  not,  at  any  time  knowingly,  do  anything  which  will  injuriously 
affect  advertising,  nor  will  we  carelessly  speak  ill  of  any  advertising  medium. 

We  will  work  together  to  the  end  of  making  all  advertising  more  truthful, 
knowing  it  will  then  be  more  effective  and  of  greater  benefit  to  the  buying 
public. 

We  will  exercise  care,  individually,  at  all  times,  to  see  that  every  advertise- 
ment with  which  we  have  anything  to  do  shall  measure  up  to  the  plain,  simple 
truth.  We  stand  firmly  for  constructive  advertising  and  condemn,  without  re- 
serve, all  forms  of  destructive  advertising. 

To  each  other  we  pledge  patient  service  toward  the  upbuilding  of  adver- 
tising in  this  conmiunity. 

To  all  business  men  of  this  community  we  pledge  co-op)eration  toward  the 
advancement  of  the  community's  business  along  sane  and  proper  lines. 

To  the  public,  whom  we  as  a  club  serve  primarily,  we  pledge  our  best  efforts 
to  make  advertising  the  servant  of  tlie  people  in  the  truest  sense. 


THE  END 


INDEX 


Acker,  Merrall  &  Condit  Co.,  241 
Acme  Tea  Company,  241 
Adding  Machine,  Burroughs,  38 
A.  D.  S.  Stores,  246 
Adulterations  and  Misnomers,  581 
Advertised  Brands  and  Jobbers,  293 
Advertised  Goods  Favored  Over  Non- 
advertised  Goods,  510. 
Advertiser    and    Consumer,    Contact 

T<|^4-  TT^f^Ti         1   I 

"Advertising  and  Selling,"  84.  90, 
289,  318,  340,  366,  373,  378,  379. 
384,  452,  457,  463,  494 

Advertising  and  Selling,  Department 
Inseparable,  125 

Advertising  and  the  Consumer,  3-43 

Advertising  Appropriations,  How 
Divided,  61-62 

Advertising,  a  Wasteless  Way,  Di- 
rect, 46C 

Advertising,  Direct-by-mail,  462-493 

.\dvertising.  Epigrams  on,  70 

Advertising  Forum  (Minneapolis)  and 
Its  Vigilance  Work,  556 

Advertising  Gives  Consumer  Stand- 
ard of  Value,  512 

Advertising  Has  Cut  Selling  Cost 
in  Two,  512 

Advertising  in  Agricultural  Press,  373 

Advertising,  Development  of  Legis- 
lation to  Regulate,  570 

Advertising  Devices,  Good  and  Bad, 
489 

Advertising,  How  Much  to  Spend  in 
Retail,  58. 

Advertising  Investment,  Average,  60 

"Advertising  Is  a  Tax  on  the  Con- 
sumer," A  Fallacy,  509 

Advertising  Magazine,  373 

Advertising  Man's  Relation  to  Others, 
188 

Advertising  Margin,  Figuring  the,  363 

Advertising  Mediums,  Developments 
in,  372-436 


Advertising,  Mediums  of,  159 
Advertising  Mediums,   Year's  Prog- 
ress, 376,  seqq. 
Advertising,  Motion-picture,  410 
Advertising,  National,  70. 
Advertising,  Needs  of,  9 
Advertising,  Newspaper,  374 
Advertising  Order  Form,  124 
Advertising,  Outdoor  Display,  374 
Advertising,  Paying,  55-58 
Advertising  Plans,  Special,  51 
Advertising,  Policies  in,  45 
Advertising,  by  Premiums,  374 
Advertising      Problems,      Analytical 

Methods  in,  340-371 
Advertising,  Psychology  of,  365 
Advertising,  Retail,  44 
Advertising,  Sincerity  in,  483 
Advertising,  Skepticism  of  the  Pub- 
lic, 9 
Advertising    Standards,    555-584 
Advertising,  Stein-Bloch,  165-167 
Advertising,  Street-car,  408 
Advertising,  Necessity  of  Continuous, 

18 
Advertising,  Timely,  52 
Advertising  to  Head  off  Complaints, 

37 
Advertising,  Trade  Papers,  375 
Advertising,  Truth  in,  3,  583 
iEolian  Company  and  Complaints,  39 
Agency  Plan,  The  Exclusive,  171 
Agricultural  Publishers'   Association, 

90. 
Agricultural  Press,  Advertismg  in,  373 
Aids  to  Salesmanship,  88 
All-package    Grocery    Stores     Com- 
pany, 242 
American     Advertisers,     Association 

of,  437 
American  Advertising   History,   Re- 
cent, 6 
American  Car  &  Foundry  Co.,  and 
Safety  Bulletm,  30 


( 


597 


598 


INDEX 


American      Newspaper      Publishers* 

Association,  419 
American  Telephone  &  Telegraph  Co., 

311 
American  Tobacco  Company,  494 
Analyzing  Dealers'  Needs,  147 
Analysis,    Advance   in    Methods   of, 

311-371 
Andrews,  E.  P.,  88 
Announcing   versus   Advertising,    46 
Appeal,  Emotional,  367 
Appendix,  585-596 
Appropriations,     Advertising,     How 

Divided,  61 
Arbuckle  Brothers,  178 
Associated  Advertising  Clubs  of  the 

World,  Chicago  Convention,  58, 

197 
'    Toronto  Convention,  112,  482,  428 
Associated  Advertising  Clubs  of  the 

World,    Work    of    Its   Vigilance 

Committee,  563 
Association,  Retail  Merchants,  68 
Astor,  Vincent,  258 
Atmosphere  in  Advertising,  485 
Automobiles     and    the    Automobile 

Market,   24 
Automobile,  a  Utility,  27 

Bank  Consolidations,  258 

Beale,  Jr.,  B.  J.,  193,  213 

Berg,  W.  M.,  287 

"Black  Cat,"  123,  124,  125 

Black  Company,  H.,  126.  147 

Birthday  Gifts,  484 

Boasting,  Bad  Effects  of,  168 

Boot  and  Shoe  Chains,  252,  253 

Boy  Scouts,  166 

Bradley  Dry  Goods  Store,  70 

Bradley  Knitting  Co.,  70,  72, 78 

Branded  Goods,   190 

Branded  Goods,  Protective  Feature, 

552 
Branders,     Arguments     of     Private, 

Brands,' Consumer's  Rights  to  Know, 

155 
Bridgman,  W.  H.,  90 
Brodegaard  Jewelry  Company,  Fred., 

254 
Bulk.  Buy  in,  4 
Bulk  versus  Packages,  Relative  Cost 

in  Buying.  4 


Burroughs  Adding  Machine.  38,  312, 

469 
Burson  Knitting  Co..  116-118 
Business     Administration,     Harvard 

Graduate  School  of,  45 
Men,  VilUge,  and  the  War,  94 
Business  Letters,  129,  147,  162 
Business   Research,    Federal   Bureau 

Advocated,  313 
Butchers,  255,  256 
Butler   Grocery    Store,    James,    241, 

269 
Buy  in  Bulk — Not  in  Package,  4 
Buy,  Making  It  Easy  to,  472 
Buyers'  Earnings,  188 
Buyers,  Satisfying  Needs,  476 
Buying  Sense,  Systematic,  281 
B.  V.  D.  Underwear,  88 

Calkins  &  Holden.  153 
Calkins,  Earnest  Elmo,  153 
Campaigns,   "Ready-made,"    Causes 

of  Failure,  356 
Capper  Farm  Papers,  89 
Car  Advertising,  Changing  of  Cards, 

401 
Cards,  Classes  of,  50 
Car,  Life  of  a,  26 
Carnegie,  Andrew,  258 
Carroll,  J.  A.,  298 
Carson,  James  B.,  65 
Cash  Register  Company  and  Com- 
plaints, 41 
Catalogue  as  Creator  of  Personality, 

481 
Catalogue  Construction,  486 
Catalogue,  Keeping  Alive  the,  475 
Catalogues,  Loose-leaf  versus  Bound 

Books  for,  479 
Catalogues,  Representative,  470 
Catalogues,   Sub-titles  for,   469 
Catalogue,  l^ses  of  the,  468 
"Catch  the  Eye"  Names  and  I'itles, 

33 
Centralized  Data  Departments,  311- 

317 
Chains  Helped   by   Public  Markets, 

243 
Chain-store  Problem,  67 
Chains  of  Coal  Stores,  257,  258 
Chains'  Selling  Advantages,  275 
Chain-store   Methods,  Typical,  262- 
.       265 


LNDEX 


599 


Chain  Store  and  National  Advertis- 
ing, The,  229-287 
Chain 'Stores  for  Cloaks,  Suits,  Etc., 

257 
Chains  Taking  Jobber's  Place,  265 
Chahners,  Hugh,  8 
Chalmers  Motor  Company,  8 
Chamber  of  Commerce  (Indianapolis) 
and    Its    Vigilance    Advertising 
Work,  560 
Changes  in  Consuming  Conditions,  24 
Charts,  Technique  of  Graphic,  461 
Cheney  Bros.,  11 
Cheney,  Horace  B.,  12,  13,  15 
Childs,  R.  S.,  16 
Circulation,  Distribution  of,  394 
Circulation,  Fireside  Glance  at,  456 
Circulation,  Judicial  Views  on,  443- 

452 
Circulation,  Judging  Quality  of,  393 
Circulation   Standards,   Advance   in, 

437-461 
Clearance  Ads,  148 
Cigar-store  Chains,  247 
Cohn,  Ernest,  30 
Colgate  &  Co.'s  Nursery  Talc  Samples, 

407 
Complaints,  Advertising  to  Head  off, 

37 
Complaints,  Telephone,  36,  37 
Complaints,  Utilizing,  37 
Composites,  Two,  73 
Concentration    of   Stores    in    Other 

Fields,  260-262 
Conditions,  Changes  in  Consuming,  24 
Construction,  Catalogue,  486 
Consumer's  Answer  to  the  Consumer's 

Attack,  6 
Confectionery  Chains,  253 
Consumer,  Changes  in,  24 
Consumers'  League,  National,  8 
Consumer's  Memory,  Length  of,   11 
Consumer's  Right  to  Know  Brands, 

155 
Consumer's  Viewpoint,  34 
Contents,  ix 

Controversy    Regarding    Nationally 
Advertised  Trademarks  and  "Pri- 
vate Brands,"  2,  536 
Co-operation,    Practical    Newspaper, 

424 
Co-operative  Plan,  Results  of,  124 
Copies,  &unple,  395 


Copy,  Changing,  32 
Copy,  How  Worked  out,  74 
Copy,  Rationalization,  367 
Cornstarch,  New  Uses  for,  33 
Correct  Answers  in  Cheney  Memory 

Tests,  Percentages  of,  13 
Correspondence  Course  for  Dealers, 

127 
Cost  of  Living,  10 
Cost  System,  Ingensoll,  161-163 
Counter  Displays,  120,  121 
Country    Store    Business,    How    to 

Secure,  99 
Cream  Separator,  De  Laval,  89 
Crofut  &  Knapp  Co.,  157 
Cross  Company,  Mark,  181 
Curtis  Publishing  Co.,  89,  311,  313, 

556 

Dairy  Field.  The.  256 

Data  Departments,  Centralized,||31 1- 

317 
"Dealer  Helps"  from  Retailer's  View- 
point, 108 
Dealer  Helps,  Useless,  152 
Dealer  Helps,  Uses  of,  142-149 
Dealers'  Co-operation  122 
Dealers,  Correspondence  Course  for, 

127 
Dealers'  Needs,  Analyzing,  147 
Dedication,  V. 

Definite  Message  in  Each  Display,  118 
De  Laval  Cream  Separator,  89 
Demonstration      Booths,      Sampling 

Through,  408 
"Demonstration  Shell,"  128 
Demonstrations,  204 
Departments,  "Service,"  36 
Department  Store  and  National  Ad- 
vertising, 183-228 
Department  Stores: 

Power  of  President,  185 

Records  of  Sales,  187 

Retail  Distribution  Still  a  Crude 

Art,  185 
Specialty  Store  Problems,  197-228 
Specialty  Stores,  192 
Des  Moines  "Capital,"  79 
Detroit,   Advertising   Methods,   205, 

206 
Displays,  Counter,  120,  121 
Displays,  Window,  116,  124 
Disputed  Medium  Questions,  418 


600 


INDEX 


Distributing  Organkations,  Types  of, 

6 
Drug  Field,  244-247 
Drug  Field,  Popular  Device  in,  179 
Druggists    and    Department    Stores, 

250 

Du  Pont  de  Nemours  Powder  Co.,  312 
Dyeing    and     Cleanmg    Chains    of 
Stores,  256 

Eastwood  &  Son  Company,  Wm.,  151 
Eberhard  Company,  George  F.,   115 
Eliminating  the  Jobber,  72 
Endorsement,    Getting    Professional. 

408 
Exclusive  Agency  Plan,  The,  171 
Exclusive  Agency,  Department  Store 

View,  174 
Extent  of  Chain-store  Movement,  230 
Filene's  Sons  Company's  Methods  of 

Business,  197-204 
Eye  Accidents,  28 
Eye  Protectors,  28 

False  Eyes  and  Causes  of  Blindness,  28 
Farmers'  Business  Demands,  99 
Farmers'   Course  and   Country  Life 

Conference,  Wisconsin,  90 ' 
Farmers  Not  Going  Back,  86 
Farm  Implement  Chains,  No.,  259 
Farm  Power  Papers,  National,  89 
Farmers'  Sales  of  Produce,  92 
Farrington,  Frank,  93 
Federal  Supply  Company,  242 
Field  and  Problems  of  Regular  Re- 
tailers, 82,  93 
Field's    and    Advertising,    Marshall, 

158,  354 
Firm  Names,  Memory  Tests  on,  12 
Five,     Ten,     and     Twenty-five-cent 

Store  Chains,  248,  249 
Flagler,  John  H.,  245 
"Flat"  Rate  Advocacy,  428,  seq. 
Food  Committee,  Mayor  Mitchel's,  6 
Food  Products,  etc..  Sampling  of,  405 
Food  Supply  Committee,  3 
"Forces,  Selling,"  455 
Foreign  Commerce,  House  Committee 

on,  |67 
Form  Letters,  Bombastic,  149 
"Forward  Law  of  Thinkmg,"  369 
Fowler,  R.  E..  127 


INDEX 


($01 


"Franklin  Co.  (Kan.)  Association,"  87 
Furniture  Field,  257 
Future    Department-store    Develop- 
ment  in  New  York,  193-204 

Garrison,  W.  W.,  304 

Geisinger,  J.  J.,  349 

General  Stores,  Goods  in  Demand  in. 

95-97 
Gimbel  Bros.,  354,  355 
Girard  Grocery  Co.,  241 
Goddard,  Charles  H.,  247 
Goods,  Branded,  190 
Goods,  Profit-marked,  191 
Goods,  Trademarked,  190 
Goodyear  Advertising  Methods,  166 
Goodyear  Tire  &  Rubber  Company. 

166  ^    ^ 

Gossard  Company,  H.  W.,  126,  134 

410 
Gossard,  H.  W.,  126,  134 
Graphic  Charts,  Technique  of,  461 
Great  Atlantic  and  Pacific  Tea  Com- 
pany, 240,  244 
Grocery  Chains,  239 
Grocery  Field,  Peculiar  Situation  in, 

178 
Guarantee,  Use  and  Value  of,  18 
Guarantee,  ^Miat  is  a  Goo<l.='  18 
Guarantees   Analyzed,   Listances  of, 
19,  20,  21,  22,  23 

Hammacher,  Schlenuner  &  Co.,  176. 

177 
Hampton,  89 

Hampton,     Commercial    Association 

of,  88 
"Hampton  Plan,"  87 
"Hampton  Plan"  and  Some  of   Its 

Advocates,  89,  90 
Hardware  Field,  259,  260 
Hardford,  George  IL,  240 
Hart,  Schaffner  &  Marx,   145,   147- 

149,  163 
Hart,   Schaffner   &   Marx,    Clothing 

Guarantee,  22 
Hart,    Schaffner    &    Marx,    Dealer 

Helps,  143 
Hart,    Schaffner    &   Marx,    Window 

Card,  144 
Hardware  Field,  Conditions  in,  175 
Hardware  Field,  Ease  of  Distribution. 

176 


Harvard  Graduate  School  of  Busineas 

Administration,  45 
Hat  Chains,  253 
Haubold,  Arthur,  89 
Hazen,  Edward  W.,  8 
Heath,  Mrs.  Julian,  6 
Hildebrandt,  Wm.  G.,  153-154,  160 
Holeproof  Hosiery,  181 
Hollingsworth,  H.  L.,  365 
Ilolzhauer,  Charles,  120 
Hotchkin,  W.  R.,  217-228,  358 
Houseiwivcs'  League,  National,  6 
Hudson  Company,  J.  L.,  204-208 
Hughes,  H.  M.,  288 
Hunsiker,  Alvin,  292 
Huyler's,  177,  178 

Index,  Pictorial,  473 

Index  to  Cheney  Memory  Tests,  13, 

14,  15 
Individuality,    a   Merchant's   Asset, 

148 
Ingersoll  &  Bro.,  R.  H.,  161 
Ingersoll  Cost  System,  161 
"Inland  Storekeeper,"  93 
Inventions,  Unsuspected  Uses  of,  31 
Investigations,  Trade,  314 
Ingersoll,  W.  H.,  237 

Watches,  388 
Iowa  and  the  Mail-order  Man,  85 
Iowa  Retail  Dealers'  Association,  89 
Irvine,  James  M.,  89 

Jewelers'   Association,  National  Re- 
tail, 66 
Jewelry  Field,  253 
Jobber  and  His  Private  Brand,  98 
Jobber,  Eliminating  the,  72 
Jobbers  and  Advertised  Brands,  293 
Jobber's  Place,  Chains  Taking,  265 
Jobbers  Who  Paddle  LTpstream,  294 
Johnson,  O.  K.,  151 
Johnson,  Roy  W.,  468 
Journals,  Technical,  389 
Judiciary,  House  Committee  on,  67 
Julius  King  Optical  Co.,  27 
Justice,  Department  of,  68 

Kahn  Tailormg  Co.,  30 
Katz,  Joseph,  18 
Kayser  Gloves,  181 
Kenosha  Hosiery  Co.,  122 
Kiefer,  A.  Wm.  F.,  162 


Kirstein,  Louis  E.,  197 

Kroger,  B.  H..  240 

Kroger  Grocery  and   Baking   Cotn- 

pany,  240 
Kuppenheimer,  The  House  of,  145, 147 

I^arimer.  H.  G.,  79-81,  88,  109,  110- 
112 

Laundries,  255 

Leonard,  E.  H„  204 

Lessons  in  Salesmanship,   130-134 

Letters  Bombastic,  Form,  148 

Letters,  Business,  129,  147.  162 

Letters,  Follow-up,  491 

Life  of  a  Car,  26 

Liggett  Company,  L.  K.,  246,  253 

Lincoln  Principle,  Abraham,  63 

Living,  Cost  of,  10 

Loose-leaf  versus  Bound  Books  for 
Catalogues,    479 

Louis,  George  S.,  167 

Lucas,  A.  M.,  115 

Ludlow  &  Squires,  175 

Limiber  Dealers'  Association,  South- 
western, 85. 

McKelvie,  S.  R.,  89 

McVey,  Hugh,  78 

Macy  &  Co.,  193 

"Made  in  Detroit  Merchandise,"  205 

Mail  Advertising,  Direct-by,  462-493 

Mailing  Lists,  Revision  of,  164 

Mailing  List,  Starting  a,  48 

Mail-order  Man,  85 

Management,    Scientific,    100-107 

Manufactured      Products,      Cheney 

Memory  Test  on,  13 
Manufacturers  Discontinuing  Private 

Brands,  290,  291 
Manufacturing  Policies,  Retail,  71 
Mark  Cross  Company,  181 
Markets  Help  Chains,  Public,  243 
Marshall    Field's    and    Advertising, 

158 
Mediums,  Advertising,  Developments 

in,  372-436 
Mediums  of  Advertising,  159 
Medium  Questions,  Disputed,  418 
"Meet  me  at  Hudson's,"  206 
Men's  Clothing  Chains,  250,  251 
Men's  Furnisliing  Field,  251 
Merchant  Dislikes   Word   "Dealer," 


602 


INDEX 


Merchant  Knows  Hia  Field,  170 

"Messenger,"  38 

Methods   of   Analysis,    Advance   in, 
311-371 

Methods   of   Management,    Modern, 
100 

Miscellaneous  Suggestions,  148 

Missouri,  85,  86 

Missouri  and  the  Mail-order  Man,  85 

Missouri,  University  of,  84,  86 

Mitchel,  Mayor,  3 

Moller  &  Schumann  Companv,   163 

Moorehead,  J.  R.,  68,  85 

Mitchel's   Food   Supply   Committee, 
Circular  of,  3,  494 
Replies    to,    by    Well-known    Ad- 
vertising Experts,  497,  seqq. 

Motion-picture  Advertising,  410 

Motion-picture,  Divisioas  of.  411, 
seqq. 

"Motion-picture  Industry  and  Its 
Advertising  Possibilities,  Th^," 
411 

Movies  and  the  Theatres,  The,  415 
Murphy,  P.  F.,  181.  182 

Names,  Cheney  Memory  Tests,  14 
Nash,  F.  W.,  178 

National   Advertisers'  Plans  for  Se- 
curing WTiolesalers'  Support,  298^ 
308 
National  Advertising,  70,  93,  254 
National    Advertising   and    the    De- 
partment Store,   183-228 
National  Bill  Posters,  124 
National  Biscuit  Company,  494 
National  Cash  Register,  311,  312 
National  Farm  Power  Papers,  89 
Nebraska  and  the  Mail-order  Man,  85 
"Nebraska  Farmer,"  89 
Nelson,  J.  M.,  69 
Newman,  A.  W.,  145 
News  Material,  Photoplays  as,  416 
Newspaper  Advertising,  374 
Newspaper    Co-operation,    Practical, 

424 
Newspaper's  Power,  426 
News-stands,  Etc,  258,  259 
"New  Ways  to  New  Business,"  166 
New  York  &  London  Drug  Compan\ . 

179 
New  York  Central  Lines,  and  Safety 
Goggles,  28 


INDEX 


603 


No    Natural    Store    Advantages    in 

Store  Chains,  276,  277 
Novelties,  System  of  Buying,  283 

Ohio  Hardware  Association.  65 
Oil  and  Gasoline  Store  Chains,  255 
Oklahoma  and  the  Mail-order  Man. 

85 
Olus  Underwear,  215-217 
Onyx  Silk  Hose,  181 
Outdoor  Display  Advertising,  374 
Owl  Drug  Company,  246,  271,  272, 

273,  286 

Package  Goods,  Reputation  and,  7 

Package  Habit,  4,  499,  seqq. 

Packages,  Wastage  in  Buying  in,  8 

Park  &  Tilford.  241 

Parsons,  S.  R.,  58 

Past  Sales,  No  Sure  Criterion  for  the 

Future,  356,  seqq. 
Pauperizing  the  Dealer,  122 
Per  Capita  Figuring,  Technique  of. 

321-325 
Percentages   of   Correct   Answers   to 

Cheney  Memory  Tests,  13 
Philadelphia,   Wholesale  Drug  Com- 
pany, 247 
Perkins,  George  W.,  3,  499 
Persuasiveness,  Table  of,  371 
Phoenix,  J.  J.,  70 

Photoplays  as  News  Material,  416 
Piano  and  Musical  Interests,  251,  252 
Pictorial  Index,  473 
Plan,  Ralston,  406 
Plans,  Trade,  87 
Policies,  Price,  75 
Policies,  Profitable  Trade,  74 
Policies,  Retail  Manufacturing,  71 
Population    as    Business    and    Sales 

Pivot,  318 
Post-ofBce  Department  and  Circula- 
tion, 395 
Powell,  J.  B.,  84,  87 
Pratt,  Llewellyn,  E.,  v 
Preface,  vii 

Premium  Advertising,  374 
Price-cutter   an    Unstable    Reliance. 

296 
Price  Policies,  How  Dealt  with,  75 
Prices  and  Standardization,  25 
"Printers'  Ink,"  3,  6,  7,  8,  11,  16,  18, 
23.  24,  27, 31, 35, 41, 59, 65, 66. 70. 


79,  87,  93,  97.  109,  112,  116,  118. 
120,  122,  126,  142,  143,  144,  145, 
151,  153,  160,  163,  167,  172,  177, 
184,  193,  204.  208,  214,  217,  229, 
237,  238,  248,  252,  257,  263,  267, 
273,  279,  286,  287,  292,  297,  298, 
299,  304,  311,  312,  313,  314,  345, 
348,  353,  361,  363,  376,  377,  390, 
400,  405,  410,  411,  418,  420,  428, 
437,  442,  443,  452,  464,  468,  475, 
476,  482,  486,  489,  497,  509,  525, 
528,  556,  560,  564,  573,  574,  576 

Printz-Biederman  Company,  127 

Problem,  Small-town,  84 

Procter  &  Gamble,  311 

Products,  Cheney  Memory  Tests  on, 
13,   14 

Products,  Names  of,  12 

Progress  in  Retail  Advertising,  44-81 

Proprietor,  Broad-gauge  Store,  62,  65 

Publications,  B'ollowing  of,  456 

Publicity  Association,  Technical,  361, 
477 

Purchasing  Power,  Pithy  Suggestions 
on,  49 

Pure  Food  Law,  582 

Quoin  Club,  494 

Rankin,  E.  W.,  89 

Rating  Agencies,  Attitude  Toward,  97 

Rate  Card,  Inefficient,  436 

Rate,  "Flat,"  423 

Rate  "Inside,"  422 

"Reasons  Why,"  128 

Records,  Sales,  119 

Regular  Retailer  and  National  Ad- 
vertising,   150-182 

Replies,  Curious,  15 

Report  of  Mayor  Mitchel's  Food 
Committee,  6 

Reputation  and  Package  Goods,  7 

Restaurant  Chains,  249,  2;jO 

Retail  Advertising,  44 

Retailer  Controls  Situation,   152 

Hetailer's  Field  and  Problems,  Regu- 
lar, 82 

Retailer  through  Consumer,  Getting, 
170 

Retail  Merchants'  Association,  68 

Retailer's  Redress,  the  Small,  265- 
274 

Revision  of  Mailing  Lists,  164 


Rexall  Stores,  246 

Ricker,  Carl  J.,  45 

Riker-Hegeman     Corporation,     245, 

246,  269 
"Rising  Costs,"  Problem  of,  150,  151, 

356 
Rock  Island  Railroad,  85 
Rochester  Advertising  Club,  151 
Roemer,  C.  F.,  89 
Rosenwald,  Julius,  258 

••Safety  First"  Crusade,  29 
Sales  Force,  Supplementing  the,  464 
Sales  Force,  Training,  134-142 
Salesmanship,  Aids  to,  88 
Salesmanship,  Lessons  in,  130-134 
Sales,|No  Criterion  of  All  the  Facts, 

Gross,   355 
Sales  Records,  119 
Saloons    and    Liquor-store     Chains, 

256,257 
Sample  Copies,  395 
Sampling  of  Food  Products,  Etc.,  405 
Sampling     Through     Demonstration 

Booths,  408 
"Saniglas"  Goggles,  Propaganda  of, 

29 
Saks  &  Co.,  193 
Schaffner,  Joseph,  143,  144,  160 
Seaman,  Inc.,  Frank,  452 
Second-hand  Car  Market,  26 
Selling  and  Advertising  Department, 

Inseparable,  126 
"Selling  Forces,"  455 
Selling  Problems,  Analjlical  Methods, 

325-340 
Service,  36,  38-43 
"Service"  Departments,  36 
Sewing-machine  Field,  260 
Sherman  Law,  66,  68 
Simmons,  J.  C,  242 
Sincerity  in  Advertising,  483 
Slogans  and  Sayings,  13,  15,  17,  33 
Slogans,  Cheney'  Memory  Tests  on,  1 1 
South  American  Business  Opportuni- 
ties, 94,  98 
Standardization  and  Prices,  25 
Standardization   of   Retail   Busiues.-^ 

277—279 
Standard  Oil  Co.,  311 
Standards,    Advance   in   Circulation 

437-461 
Standards,  Advertising,  555 


4 


604 


INDEX 


Til 


Standards  of  Practice,  583 
Stanley,  Wisconsin,   and    Its   Trade 

Problems,  90-93 
Starrett  Company,  L.  S.,  121 
Starting  the  Wheels  Mox-ing,   128 
State  "Percapitarithms,"   320-325 
Statistics  as  Applied  to  Advertising 

and  Selling  Problems,  317 
Staulcup,  M.  P.,  116 
Stein-Bloch   Advertising,   103-165 
Stevens,  E.  H.,  37 
"Store  Personality,"  Developing,  52- 

54 
Strauss,  Julius,  175 
Strawbridge  &  Clothier,  193 
"Successful  Farming,"  78 
Suggestions,  Miscellaneous,  145 
Sullivan,  George  L.,  24 
"System,"  45, 46, 52, 54, 100,  313, 326, 

356 

Taylor,  Frederick  W.,  101,  105 
Telephone  Complaints,  How  Handled, 

36,  37 
Theatrical  Chains,  258 
The  United  Jewelers,  Inc.,  254 
Tinsman,  Robert,  180,  349 
Toledo  "Times,"  65 
Trade  Journals,  74 
Trademarks,  Cheney  Memory  Tests, 

14 
Trademarks,  Special,  295 
Trade  Papers  Advertising,  375 
Trade  Policies,  Profitable,  74 
Tradition,  Breaking  Away  from,  362 
Trade    Investigations,    814-317 
Training  Sales  Force,  134 
"Trenton  (Mo.)  Idea,"  87 


Truth  in  Advertising,  3,  *83 

Types  of  Distributing  Organizations,  6 

Tyrell,  W.  H..  71 

Underwear,  Olus,  215-217 

United  Cigar  Stores,   245,  246,  266, 

270,  277,  311 
United  Drug  Company,  253 
United  Drug  (Rexall)  System,  247, 

248 
Useless  Dealer  Helps,  152 
Uses  of  Dealer  Helps,  142-149 

Viewpoint,  Consumer's,  34 
Volstead,  A.  J.,  69 

Wanamaker's  and  Advertising,  158, 
217,  354,  355 

Wells  Fargo  Company,  37 

Wenzen,  John,  457 

"What  Do  You  Know  About  Your 
Own  Business?"  163 

"What  Is  a  Good  Guarantee?"  18 

Whelan,  George  B.,  245 

WTioIesaler  and  National  Advertis- 
ing, The,  288-308 

Wholesale  Dry  Goods  Association, 
292 

Window  Displays,  116, 124 

WinseU,  John,  317 

Winsten,  H.  J.,  122 

WooUey,  Edward  Mott,  184 

Woolworth  Company,  F.  W.,  248* 
279,  280,  285 

Young.  Lafe,  79,  428 

Zimmerman,  M.,  17»-174,  208,  229 


XHX  COUKTRY  LXIE  FISSS,  CAKDBN  OTY,  NEW  YORK 


APR  27 


^d2i 


A^5>/  O/V/5^ 


APR  2  5 1994 


0041414187 


END  OF 
TITLE 


